As a potent grain refiner for steel casting, TiN is now widely used to refine γ-austenite in steel additive manufacturing (AM). However, the refining mechanism of TiN during AM remains unclear despite intensive research in recent years. This work aims to boost our understanding on the mechanism of TiN in refining the γ-austenite in AM-fabricated 316 stainless steel and its corresponding effect on the mechanical behaviour. Experimental results show that addition of 1 wt.% TiN nanoparticles led to complete columnar-to-equiaxed transition and significant refinement of the austenite grains to ∼2 µm in the 316 steel. Thermodynamic and kinetic simulations confirmed that, despite the rapid AM solidification, δ-ferrite is the primary solid phase during AM of the 316 steel and γ-austenite forms through subsequent peritectic reaction or direct transformation from the δ-ferrite. This implies that the TiN nanoparticles actually refined the δ-ferrite through promoting its heterogenous nucleation, which in turn refined the γ-austenite. This assumption is verified by the high grain refining efficiency of TiN nanoparticles in an AM-fabricated Fe-4 wt.%Si δ-ferrite alloy, in which δ-ferrite forms directly from the melt and is retained at room temperature. The grain refinement is attributed to the good atomic matching between δ-ferrite and TiN. Grain refinement in the 316 steel through 1 wt.% TiN inoculation not only eliminated the property anisotropy but also led to a high strain-hardening rate upon plastic deformation and thereby a superior strength-ductility synergy with yield strength of 561 MPa, tensile strength of 860 MPa and elongation of 48%.