Gas metal arc welding (GMAW) is extensively used for joining of different graded steels as well as aluminium and other nonferrous materials. GMAW offers clean welding with low defects without using flux and suitable for different positional welding. In the present work, a fabricated automatic movement setup is used for GMAW to study the influences of four different process parameters during joining of austenitic stainless steel AISI 316 using AISI 304 (ER304) filler wire. With this setup, welding is carried out maintaining a constant contact tube-to-workpiece (CTW) distance and uniform heat input. Experimental results and subsequent analysis show that the toughness is most significantly influenced by voltage followed by welding speed, gas flow rate, and current. Toughness reduces with the increase in shielding gas flow rate and welding speed as austenite and traces of retained delta ferrite may be present due to high solidification rate. Metallurgical observations by X-ray diffraction (XRD) and scanning electron microscopy indicate that solidification mode is mainly characterized by formation of fully austenite or austenite and ferrite at cell and dendritic boundaries. XRD results revealed that higher toughness is observed due to minimum formation of carbides.