The dynamic shear deformation behaviour and fracture characteristics of 316L stainless steel are investigated using a split-Hopkinson torsional bar system at temperatures of −150, 25 and 300°C and strain rates ranging from 1000 to 3000 s⁻¹. The results show that the flow stress, shear fracture strain, work hardening rate, and strain rate sensitivity all increase with increasing strain rate for a given temperature, but decrease with increasing temperature given a constant strain rate. The activation energy decreases with increasing shear stress for a constant shear strain, but increases with increasing shear strain given a constant shear stress. Optical microscopy observations reveal that localized plastic flows occur in the shear deformation region. Moreover, the flow angle increases with increasing strain rate and temperature. Scanning electron microscopy observations show that the fracture surfaces are characterized by a dimple-like structure, which indicates a ductile failure mode. The morphology and density of the dimple-like structures are highly sensitive to the strain rate and temperature conditions. Overall, the microstructural observations show that the shear response of 316L stainless steel is directly related to the effects of the strain rate and temperature on the evolution of the sheared microstructure.