A specific phenomenon - highly localized regions of deformation - was found and investigated at the free surface and near-surface layer of a neutron irradiated AISI 304 stainless steel bend specimen deformed to a maximum surface strain of 0.8%. It was shown that local plastic deformation near the surface might reach significant levels being localized at specific spots even when the maximum free surface strain remains below 1%. The effect was not observed in non-irradiated steel of the same composition at similar strain levels. Cross-sectional EBSD analysis demonstrated that the local misorientation level was highest near the free surface and diminished with increasing depth in these regions. (S)TEM indicated that the local density of dislocation channels might vary up to an order of magnitude. These channels may contain twins or may be twin free depending on grain orientation and local strain levels. BCC-phase ($\alpha$-martensite) formation associated with channel-grain boundary intersection points was observed using EBSD and STEM in the near-surface layer. \textcopyright 2014 Elsevier B.V. All rights reserved.