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The ultrafine-grained microstructures and their effect on the yield strength of a 316L-type austenitic stainless steel processed by large strain cold/warm rolling and subsequent annealing were studied. A kind of continuous recrystallization developed during annealing, resulting in the evolution of uniform ultrafine-grained microstructures with relatively high residual dislocation densities. The development of such microstructure at 973 K led to excellent combination of tensile properties including high yield strength (σ_0.2 > 900 MPa) and satisfactory plasticity (δ > 15%). A unique power law function between the annealed grain size and the dislocation density with a dislocation density exponent of −0.5 was obtained for these continuously recrystallized microstructures. A physically justified explanation of the observed structural/substructural strengthening is introduced.