This study investigates the influence of titanium (Ti) addition on the densification, hardness, and microstructural evolution of 316L austenitic stainless steel produced by powder metallurgy. Five compositions were examined: pure 316L and 316L with 3, 6, 9, and 12 wt.% Ti. The powder mixtures were prepared by planetary ball milling for 2 h, followed by uniaxial cold compaction at 1400 MPa and sintering at 1200 °C for 60 min in an argon atmosphere. The results reveal a clear density–hardness trade-off as Ti content increases. The relative density decreased from 95.32% for pure 316L to 83.88% for the 12 wt.% Ti composite, indicating that Ti addition reduced densification efficiency during sintering. This reduction is mainly associated with increased porosity, possible oxide-related diffusion barriers, and the formation of heterogeneous Ti-rich regions. In contrast, the hardness showed a non-monotonic response. The addition of 3 wt.% Ti reduced the hardness to 108 HV, mainly due to the dominant effect of porosity. However, further Ti additions increased the hardness substantially, reaching 232 HV at 12 wt.% Ti. This improvement is attributed mainly to the formation of hard Ti-containing intermetallic regions and possible solid-solution effects. Overall, tailoring Ti content provides a promising route for modifying the microstructure and hardness of powder-processed 316L stainless steel, while maintaining the advantages of a conventional press-and-sinter processing route method.