Research conducted on steels is motivated by a technological need to further improve their properties. Among the different steel types, austenitic stainless steels possess good corrosion resistance and formability. However, they also have a low yield strength. One way of increasing the yield strength is by grain refining. This work presents a study on the cavitation erosion and friction behavior of AISI 304 austenitic stainless steel characterized by two different grain sizes: 2.5 μm and 40 μm. The cavitation erosion behavior in water with different pH values and at room temperature has been studied by using a 20 kHz ultrasonic vibratory apparatus. The grain size of the steels has an important effect on the nature of damage produced on the surface of the samples. The resistance to cavitation erosion increases with decreasing grain size. It was also found that cavitation erosion resistance of the two steels is sensitive to variations in the pH value; decrease of this value produces an increase in surface damage. Using a precision microtribometer, with applied loads in the μN regime, it was found that capillarity plays a dominant role. At the same loads, in high humidity environments, both the fine and coarse grain steels exhibit high friction relative to measurements performed under dry conditions. At high loads (20 mN and above) a reversal in microfrictional behavior occurs in that friction is higher under dry conditions than under moist conditions.