It is well-known that steels always oxidize faster in the environments containing water vapour than in dry oxygen. Due to the difficulties in obtaining necessary experimental scale of observations, the mechanisms responsible for the steam-accelerated oxidation are still unclear. Through a combination of multiscale characterization techniques, the surface oxide film formed on an Fe-17Cr-9Ni stainless steel after exposure to high-temperature steam has been studied in detail. The characterization results obtained in this study reveal that the formation of the inner oxide layer, which is critical in protecting the base metal, is due to internal oxidation instead of external oxidation. The classic internal oxidation model underestimates the thickness of the inner oxide layer by one order of magnitude. This difference can be explained by the existence of fast diffusion channels in the inner oxide layer. This study provides direct evidence of a high density of nanopores in the oxide phase of the internal oxide layer, which can act as fast-diffusion channels if interconnected, and proposes their mechanisms of formation, a consequence of water dissociation-induced protons promoting the formation, migration, and clustering of both cation and anion vacancies.