Diffusion bonding of Zr‐4 alloy and 316 stainless steel (SS) without and with the Nb/Ni composite interlayer has been performed. The maximum shear strength of the joint without interlayer is 131 MPa at 900 °C for 30 min under 10 MPa. The results show that the fracture occurs at the diffusion layer as a result of the limited mutual solubility between Zr and Fe and detrimental residual stress. Sound diffusion bonding joints without defects are obtained at lower bonding temperatures due to the addition of Nb/Ni interlayer, and the maximum shear strength is 380 MPa at 820 °C. The typical microstructure of the Zr‐4/Nb/Ni/316SS joint is Zr‐4/Zr(Nb)/Zr(Fe, Nb)2 /Zr(Nb)/Nb/Ni3Nb/Ni/(Fe, Cr, Ni)/316SS. The highest hardness value of the joint is 422 HV at the Ni3Nb phase, and cracks appear at the interface between Ni3Nb and the remaining Ni foil. The shear strength first increases and then drops as the Ni3Nb layer thickened. The peak residual stress of the joint reduces from 698 to 466 MPa due to the addition of the Nb/Ni composite interlayer. Finally, the growth kinetic model of the Ni3Nb layer is calculated, which provides a pathway for the regulation of joint properties.