Soft magnetic metallic absorbents suffer from severe oxidation, reduction in permeability and deterioration in microwave absorption when exposed to high temperatures. In this study, we prepared flaky 304 stainless-steel powders as new microwave absorbents via deformation-induced ferromagnetism. The 304 stainless-steel powders showed significant increases in saturation magnetization (Ms) from 1.03 to 82.46 emu/g when their shape was changed from spheroids to flakes; the Ms further increased to 92.29 emu/g after heat treatment at 500 °C in air. The permeability of 304 alloy powders also showed an obvious increase after ball milling and remained roughly stable after heat treatment at 500 °C in air. Moreover, the permittivity exhibited a sharp decrease after heat treatment, enabling the improvement of impedance matching and microwave absorption. After heat treatment at 500 °C in air for 100 h, the simulated reflection loss of 304 stainless-steel powders with wax still showed attractive levels, giving a minimum value of −22 dB and remaining below −6 dB over 8.5–16.5 GHz at a thickness of 2 mm. Our work can help to include paramagnetic alloy systems as new microwave absorbents for working in harsh environments.