An austenitic stainless steel containing high density of nanosized NbC precipitates was subjected to micropillar compression tests. Based on the negligible size effect of micropillars with 1-5 mu m diameter, the strengthening effect of NbC precipitates was measured. Further compression tests with various terminal strain were performed to understand the dynamic evolution of NbC precipitates during compressive deformation. The dissolution of nanosized NbC precipitates was observed even in the elastically deformed micropillar, caused by the interaction between the pre-existing dislocations and NbC precipitates. In the plastically deformed micropillar, the reprecipitation of NbC precipitates along the slip band was observed, while the partially dissolved NbC precipitates were observed in the region away from the slip band. In addition, the measured strengthening effect of NbC precipitates was compared with existing prediction models, but large discrepancy was observed between them. Finally, with modification of an existing hardening model by incorporating relaxation at the interface and consideration of dissolution of NbC precipitates before plastic deformation, the measured and predicted strengthening effects became comparable.