AISI type 321 stainless steel heat exchanger tubes failed after only three months of service. Macroscopic examination revealed that the leaks were the result of localized pitting attack originating at the water side surfaces of the tubes. Metallographic sections were prepared from both sets of tubes. Microscopic examination revealed that the pits had a small mouth with a large subsurface cavity which is typical of chloride pitting of austenitic stainless steel. However, no pitting was found in other areas of the system, where the chloride content of the process water was higher. This was attributed to the fact that they were downstream from a deaeration unit. It was concluded that the pitting was caused by a synergistic effect of chlorine and oxygen in the make-up water. Because it was not possible to install a deaeration unit upstream of the heat exchangers, it was recommended that a molybdenum-bearing stainless steel such as 316L or 317L be used instead of 321.