Directed energy deposition (DED) as a metal additive manufacturing technology can be used to produce or repair complex shape parts in a layer-wise process using powder or wire. Thanks to its advantages in the fabrication of net-shape and functionally graded components, DED could attract significant interest in the production of high-value parts for different engineering applications. Nevertheless, the industrialization of this technology remains challenging, mainly because of the lack of knowledge regarding the microstructure and mechanical characteristics of as-built parts, as well as the trustworthiness/durability of engineering parts produced by the DED process. Hence, this paper reviews the published data about the microstructure and mechanical performance of DED AISI 316L stainless steel. The data show that building conditions play key roles in the determination of the microstructure and mechanical characteristics of the final components produced via DED. Moreover, this review article sheds light on the major advancements and challenges in the production of AISI 316L parts by the DED process. In addition, it is found that in spite of different investigations carried out on the optimization of process parameters, further research efforts into the production of AISI 316L components via DED technology is required.