Drinking water distribution system (DWDS) necessitates sustainable, durable, and nonpolluting materials for enhanced water quality of the end-users. Stainless steel (SS) is gaining momentum in DWDS, particularly in end-point distribution facilities such as secondary water storage tanks, pumps, and household water pipes due to its high chemical stability and robust mechanical strength. However, SS’s susceptibility to corrosion in given defect areas is of great concern, and there is a lack of fundamental insight on SS corrosion from an interdisciplinary perspective of materials science and environmental science. Herein, the SS corrosion in the DWDS environment is critically assessed, encompassing the basic science of SS corrosion occurrence, its cascading influence on water quality, and anticorrosion strategies. Electrochemical corrosion mechanisms of SS corrosion are specifically differentiated, particularly those initiated at given SS defects, including welding points, grain boundaries, and areas with tensile stress. It is shown that SS corrosion influences water quality by destroying the Cr-rich passive film and releasing Cr, Fe, and other heavy metals from the corrosion scale. The critical factors influencing SS corrosion are subsequently identified, namely, SS elemental composition, SS manufacturing process (e.g., heat-affected zone, stress concentration), and water condition in DWDS (e.g., chlorine, oxygen, sulfate, hydraulic shock, pH). Corresponding strategies are elucidated to facilitate the anticorrosion resistance of SS and improve the water quality, including SS alloying enhancement, SS dispersion strengthening, SS surface treatment/modification, and tuning water condition in DWDS. Overall, this review highlights the importance of controlling SS corrosion, which could provide guidance on the rational design and utilization of SS in DWDS to enhance the ultimate water quality of the end-users and the overall resilience of the DWDS.