In this study, the effects of Ultrasonic Nano-crystal Surface Modification (UNSM) on the microstructure changes and the mechanical properties of austenitic stainless steel 304 were studied. Due to the dynamic impacts induced by the multiple strikes during UNSM, surface nanocrystallization and transformation to martensite has been achieved. The work-hardened surface layers (3.5 times the original hardness) lead to significant improvement in the mechanical properties as measured by nano-indentation and tensile test. The results demonstrate that UNSM is a powerful surface processing technique that can improve component mechanical properties and performance.