Corrosion of mooring chains is regarded as one of main threats to the offshore mooring systems. Localized corrosion is even more dangerous than uniform corrosion because it may not show significant mass loss but it can cause stress concentration and initiate cracks under force, leading to accelerated degradation of mooring chains. Localized corrosion of steel in seawater is influenced by many factors such as the local heterogeneities of the steel, and the local electrochemical and microbiological environments. It is difficult to predict and the mechanism is not fully understood. The aim of this work was to study the mechanism of localized corrosion on mooring chain steel in seawater which is helpful in the search for corresponding monitoring tools and mitigation methods. The corrosion behavior of chain steel grade R4 was studied in artificial seawater and artificial seawater containing microorganisms collected from a practice field. The corrosion behavior of the steel was studied using different techniques such as potentiodynamic polarization, linear polarization resistance measurements and electrochemical impedance spectroscopy. The microstructures such as inclusions and compositions of the chain steel were studied using SEM and EDS. The microbial cells were observed using epi-fluorescence microscopy. The corrosion morphology and pit geometry were investigated using photo-microscopy. The localized corrosion rate has been found to be much higher than the uniform corrosion rate of the steel in the seawater in the presence of bacteria. In the case of localized corrosion, applying uniform corrosion measurement techniques and formulas is not considered representative. The representative areas have to be introduced to match physical results with the measurements. Inclusions, such as MnS and TiVCr found in the steel have a critical influence on localized corrosion. The corrosion mechanism of the steel in seawater is discussed.