After development of tungsten alloys and polycrystalline cubic boron nitride (PCBN) tools, lot of progress is made in FSW of stainless steel. Although some issues remain to be solved, satisfactory welds are produced and weld properties are found suitable for the intended applications. This paper summarizes the progress of research work on Friction stir welding of different types of stainless steels. It covers the research made in the selection of suitable tool materials, optimizing the process parameters such as tool travel speed, rotational speed, tilt angle etc. The influence of Friction stir welding on microstructure and mechanical properties of welds has also been reviewed. Fusion welding involves use of filler materials, shielding gases, and development of high energy density which results wider heat affected zone. The weldments show appreciable modification in the microstructure and properties of weld and heat affected zones, which may result solidification defects like distortion, , lack of penetration, poor fusion, cracks etc. Use of plasma arc and laser beam welding techniques can produce sound welds of thicker materials with narrow heat affected zone [2], however these techniques are not suitable for certain materials such as aluminium, magnesium etc.The drawbacks in the fusion welding techniques can some extent addressed by solid state welding techniques (e.g. resistance welding, friction welding) in which welding takes place at a temperature lower than the melting point of base metals and also no filler material and / or shielding gases are required. In resistance welding coalescence occurs due to heat generated by contact resistance and applied pressure and hence, it is not suitable for materials having high electrical conductivity (e.g. aluminium, copper). Friction welding employs frictional heat generated when a moving workpiece and a fixed component are forced together in order to obtain the required heat and temperature for weld. However, the application of friction welding is limited by the geometry of the workpieces to be joined.The above difficulties can successfully overcome by friction stir welding (FSW), a solid state welding process which was developed by the welding institute (TWI) [3] primarily for welding of aluminium and magnesium based alloys. The major advantages of FSW over other welding processes are lower distortion, good dimensional stability, absence of cracking etc.