To investigate the initiation and propagation behavior of small cracks and the relationship between crack propagation and fatigue life, strain-controlled in-phase and 90° out-of-phase axial-torsional fatigue tests were conducted at 550°C, using tubular specimens of 304 stainless steel with and without surface notches. Each test was interrupted at frequent intervals to make a film replica of the outer surface of the specimen for examination with an optical microscope. Most of the fatigue life was spent in the propagation of small cracks less than 2 mm long. Regardless of loading conditions, the crack propagation rate correlated well with the equivalent shear strain range defined as a function of shear strain range and normal strain range on the plane of maximum shear strain range. The biaxial low-cycle fatigue life could be estimated from the relationship between the crack propagation rate and the equivalent shear strain range.