An attempt was made to modify the surface of an austenitic stainless steel using laser surface melting (LSM) technique to improve the localized corrosion resistance. AISI type 316 stainless steel (SS) specimens in solution annealed, cold worked (5, 10, 15 and 20%) and sensitized (923 K, 20 h) conditions were laser surface melted using a pulsed ruby laser at the energy of 6 J per pulse. The melted layers were characterized by small angle X-ray diffraction (XRD), optical microscopy and scanning electron microscopy (SEM). Pitting corrosion studies were carried out on the melted region of the solution annealed specimens by potentiodynamic polarization method in acidic chloride medium. Intergranular corrosion studies were carried out on the melted regions of sensitized specimens by ASTM A262 practice A (etch test) and electrochemical potentiokinetic reactivation (EPR) test. The as-melted region of the cold worked specimens, and the cold worked, laser surface melted and heat treated (923 K, 5 h) specimens were tested as per ASTM A262 practice A to observe the changes in their microstructure. The results indicated an improvement in the resistance to pitting corrosion and intergranular corrosion after LSM. The results are explained on the basis of the homogeneous and non-sensitized microstructure obtained on the surface owing to laser surface melting. The results suggest that LSM can be used as an in-situ method to increase the life of a component by modifying the surface microstructure and thus improving localized corrosion resistance.