The novel hybrid manufacturing process incorporating additive manufacturing (AM) with a subsequent hot compression process has been proposed and applied to 316L stainless steel (316L SS). Compared to the conventional wrought 316L SS, the significantly coarser grain size was characterized in the directly AMed specimen, resulting in unacceptable mechanical properties as safety-critical parts. These coarse grains can be refined through the subsequent hot compression process. However, the detailed grain refinement process in these AMed materials has not been exploited. This motivates the study of the grain refinement of AM specimens through dynamic recrystallization (DRX) in hot compression. Hot compression was applied on AMed 316L SS specimens at temperatures from 800 °C to 1000 °C and different strain rates of 0.01 s−1, 0.1 s−1 and 1 s−1 by Gleeble. The results were compared with conventional wrought-annealed 316L SS specimens. To explain the flow stress behaviour, the underlying grain size, orientations, morphologies, and geometrically necessary dislocation (GND) density distribution and evolution were characterized by the electron backscatter diffraction (EBSD). The results suggest that the initial microstructure difference plays a dominant role in the flow stress response, and the DRX behaves very differently in these AMed and wrought-annealed specimens.