Stainless steel does not readily corrode, rust or stain with water as ordinary steel does. However, it is not fully stain-proof in low-oxygen, high-salinity, or poor air-circulation environments. There are different grades and surface finishes of stainless steel to suit the environment the alloy must endure. Stainless steel is used where both the properties of steel and corrosion resistance are required.

Stainless steel differs from carbon steel by the amount of chromium present. Unprotected carbon steel rusts readily when exposed to air and moisture. This iron oxide film (the rust) is active and accelerates corrosion by forming more iron oxide; and, because of the greater volume of the iron oxide, this tends to flake and fall away. Stainless steels contain sufficient chromium to form a passive film of chromium oxide, which prevents further surface corrosion by blocking oxygen diffusion to the steel surface and blocks corrosion from spreading into the metal's internal structure. Passivation occurs only if the proportion of chromium is high enough and oxygen is present.