An austenitic stainless steel for use in engine gaskets having a high fatigue strength and resistance to settlement and method of manufacture thereof. The austenitic stainless steel is prepared by cold rolling at least 40%, annealing at a temperature of 700° C. to 900° C. followed by temper rolling with a reduction of at least 40%. The metal structure obtained by annealing is a recovered unrecrystallized structure or a mixed structure of a recovered unrecrystallized structure and a recrystallized structure. The austenitic stainless steel includes at most 0.03% C, at most 1.0% Si, at most 2.0% Mn, 16.0% to 18.0% Cr, 6.0% to 8.0% Ni and up to 0.20% N.