A shrunk-fit 18 Mn-5Cr steel retaining ring failed without warning during normal unit operation of a 380 MW electrical generator. The cause of the ring failure was determined to be intergranular stress-corrosion cracking (IGSCC) because of the high strength of the ring material and the presence of moist hydrogen used to cool the ring. Factors which promoted the failure were higher than normal strength levels in the ring material, lower than normal ring operating temperatures, possible moisture in the lubrication oil system, periodic poor performance of the hydrogen dryers, and a ring design which allowed water to become trapped in a relief groove. These factors caused pitting in the ring in an estimated 100 hours of operation. The ring had been inspected previously 18 months prior to the failure and no defects or pitting were found. Calculations showed that a 0.127-cm (0.050-in.) deep pit could grow to a critical size in 3000 to 4000 hours of operation. To prevent further failures, it was recommended that the ring be replaced with an 18 Mn-18Cr alloy with superior resistance to IGSCC. A program of periodic inspection and replacement of other retaining rings in the system was also recommended.