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Particles of AISI 304L stainless steel powder were spheroidized by the induction plasma spheroidization process (TekSphero-15 spheroidization system) to assess the effects of the spheroidization process on powder and part properties. The morphology of both as-received and spheroidized powders was characterized by measuring particle size and shape distribution. The chemistry of powders was studied using inductively coupled plasma optical emission spectroscopy for evaluation of composing elements, and the powder’s microstructure was assessed by X-ray diffraction for phase identification and by electron backscattered diffraction patterns for crystallography characterization. The Revolution Powder Analyzer was used to quantify powder flowability. The mechanical properties of parts fabricated with as-received and spheroidized powders using laser powder bed fusion process were measured and compared. Our experimental results showed that the fabricated parts with plasma spheroidized powder have lower tensile strength but higher ductility. Considerable changes in powder chemistry and microstructure were observed due to the change in solidification mode after the spheroidization process. The spheroidized powder solidified in the austenite-to-ferrite solidification mode due to the loss of carbon, nitrogen, and oxygen. In contrast, the as-received powder solidified in the ferrite-to-austenite solidification mode. This change in solidification mode impacted the components made with spheroidized powder to have lower tensile strength but higher ductility.