Abstract: 1Cr18Ni9Ti stainless steel sheet was treated by ball milling. The microstructural evolution induced by shear-stress along the depth was examined by using optical microscopy, X-ray diffraction and transmission electron microscope, respectively. The results showed that shear-stress can induce surface nanocrystallization in 1Cr18Ni9Ti sheet. The grain refinement procedure is summarized as follows: the formation of dislocation cells through the propagation, slip, annihilation and recombination of the dislocations in the austenite matrix; the transformation of dislocation walls into small and large angle boundaries to refine the initial coarse grains into submicro-grains; the strain-induced mechanical twinning and nano-scale lamellar martensite; further subdivision of refined grains by dislocation activities and mechanical twinning leading to the formation of equiaxed nanoscale grains with random orientations. The direction of external loads does not affect the grain refinement procedure, but can change the thickness of deformation layer.