Abstract: Water atomizing technology is usually adopted for manufacturing iron and low alloyed steel powder,the main reason of which consists in low productive cost and powder having irregular shape, resulting in relatively high strength of green compacts. Such technology is being more and more used for the preparation of stainless steel powder. The elements such as Cr, Mn, Si, etc in stainless steel are liable to form oxides. Therefor, there is a very serious problem of oxidation of water-atomized stainless steel powder which greatly influences the sintering process and mechanical properties of materials, with the purposes of decreasing the productive costs of sintered stainless steel and no damaging its mechanical properties,it is of very importance to effectively reduce oxygen contents in sintered stainless steel. The present paper has discussed emphatically the influences of using carbon as reducing agent on the vacuum sintering process of water-atomized austenite stainless steel powder and on its mechanical properties.