The microstructural response of a coarse grained AISI 304 stainless steel submitted to biaxial tensile loading was investigated using SEM and X-ray diffraction. The specimen geometry was designed to allow for biaxial stress state and incipient crack in the center of the active part under biaxial tensile loading. This complex loading was performed step by step by a micromachine fitting into a SEM chamber. At each loading step FSD pictures and EBSD measurements were carried out to study the microstructural evolution of the alloy, namely grain rotations and misorientations, stress-induced martensite formation and crack propagation. According to their initial orientation, grains are found to behave differently under loading. Approximately 60% of grains are shown to reorient to the [110] Z orientation under biaxial tensile loading, whereas the 40% left undergo high plastic deformation. EBSD and XRD measurements respectively performed under loading and on the post mortem specimen highlighted the formation of about 4% of martensite.