The results of both surface and bulk nitriding treatments were compared in order to investigate microstructural precursors for decomposition of nitrided stainless steels. Surface nitriding and decomposition of type 316 stainless steel were performed by plasma immersion ion implantation (PI3) at low and intermediate temperatures and plasma nitriding, while bulk nitriding of type 304 stainless steel was achieved by low energy reactive milling in ammonia, followed hot pressing or annealing of the nanostructural powder. The results of the PI3 investigations indicate that, under implantation conditions of relatively low temperatures (< 500°C) the pseudo-eutectic decomposition products, α + CrN are associated with evidence of a solid-state amorphisation, in the form of a narrow amorphous layer. The amorphous layer generally occurs below the surface, inconsistent with the explanation of radiation damage as its origin. On the basis of both previous investigations and current microstructural observations it is proposed that, in fact, the solid state amorphisation associated with nitrogen implantation occurs when the pseudo-eutectic reaction occurs at temperatures too low for crystallisation to occur. Furthermore, this amorphisation reaction is a requirement for the formation of the ultrafine lamellar pseudo-eutectic decomposition product commonly observed in nitrided stainless steels nitrided at temperatures below 500°C. The results of studies of the decomposition of nitrided nanostructural powder produced by reactive milling were also found to be consistent with this proposed model. A vertical section of the Fe-18Cr-8Ni-N pseudo-phase diagram at temperatures below 550°C is proposed.