Development of liquid lead cooled nuclear systems requires consideration of compatibility issues with the construction materials. In order to understand the corrosion or passivation behavior of the 316L austenitic stainless steel, the steel specimens were exposed for 1000 hours in liquid lead with 10-7 wt. % oxygen level at 480 °C in static and flowing (velocity 1.6 m.s-1) conditions. Post-test microscopy investigation using SEM and FIB was performed and it demonstrated significant differences in the formation of thin oxide layers in the two conditions. Maximum oxide thickness was 2 µm in the static Pb and less than 0.1 µm in the flowing Pb. In the static condition, oxide scale was not continuous and local corrosion attack was indicated; but in flowing condition the oxide layer was continuous without any corrosion attacks.