In North America, legislative pressures to minimize pollution from motor vehicles are placing greater demands on the vehicle exhaust systems. Because of this, and the increasing market demand for long-term vehicle warranties, conversion to all stainless steel exhaust systems have been progressing steadily since mid-1990s. All stainless steel exhaust systems are expected to become more popular in Europe and Asia as well, in response to similar legislative agenda. In an all stainless steel exhaust system, PM stainless steel exhaust flanges and HEGO bosses are frequently selected over wrought (stamped and formed) stainless steel components. This is because PM stainless steel provides significant advantages in performance, cost and design flexibility, over their wrought counterparts. The improved performance is primarily due to the fact that PM stainless steel is more resistant to spalling of oxide scales in application-specific cyclic oxidation tests, compared to wrought stainless and wrought carbon steels. This paper investigates the cause of the superior resistance to scaling of PM stainless steels in these oxidation tests. Stainless steel flanges made of 400 series alloys, via PM and wrought processes, were investigated to determine the rate of the oxide scale build up, and the subsequent spalling of the scale. Microstructural examinations revealed major differences in the characteristics of the scale formed in these two types of materials. The lower coefficient of thermal expansion, combined with the beneficial effect of pore-scale interaction, are found to be responsible for stronger adherence of scale to the metal substrate in the case of PM, which in turn prevents spalling of the scale during thermal cycling.