Ductile alloys fail in corrosive environments by intergranular stress corrosion cracking, through interactions between mechanical and chemical processes that are not yet understood. We investigate formation and mechanical effects of metal defects produced by grain boundary corrosion of low-alloy pipeline steel, at conditions of high susceptibility to stress corrosion cracking in the absence of hydrogen evolution. Nanoindentation measurements show local softening near corroded grain boundaries, indicated by significantly reduced critical loads for dislocation nucleation. Molecular dynamics simulations of nanoindentation of bulk iron showed that metal vacancies and not interstitial hydrogen atoms explain the observed critical load reduction. Both the dislocation activation volume and dislocation activation energy for vacancy-charged samples are found to be nearly one-half of that for a hydrogen charged samples. Quantitative agreement with experimentally measured indentation response was found for vacancy concentrations equivalent to the bulk silicon concentration in the steel, suggesting that vacancies originate from oxidation of reactive silicon solute atoms at grain boundaries. The results help explain the chemical mechanism of formation of vacancy defects that may participate in grain boundary degradation in the absence of hydrogen embrittlement environment.