Recently, a technique for rapidly determining a material's fatigue limit by measuring energy dissipation using infrared thermography has received increasing interest. Measuring the energy dissipation of a material under fatigue loading allows the rapid determination of a stress level that empirically coincides with its fatigue limit. To clarify the physical implications of the rapid fatigue limit determination, the relationship between energy dissipation and fatigue damage initiation process was investigated. To discuss the fatigue damage initiation process at grain size scale, we performed high-spatial-resolution dissipated energy measurements on type 316L austenitic stainless steel, and observed the slip bands on the same side of the specimen. The preprocessing of dissipated energy measurement such as motion compensation and a smoothing filter was applied. It was found that the distribution of dissipated energy obtained by improved spatial resolution measurement pinpointed the location of fatigue crack initiation. Owing to the positive correlation between the magnitude of dissipated energy and number of slip bands, it was suggested that the dissipated energy was associated with the behavior of slip bands, with regions of high dissipated energy predicting the location of fatigue crack initiation.