Pilot plant annealing and pickling experiments have been performed to study the effect of the higher water vapour level in oxyfuel annealing on oxidation and pickling. The material studied was extruded tube of an austenitic stainless steel grade EN 1.4307 (AISI 304L) annealed in a propane-fired furnace with air-fuel and flameless oxyfuel burners. The experiments were performed in the time regime of 120 - 360 seconds at a holding temperature of 1100 °C, in order to simulate industrial annealing of tube. Differences in oxidation and pickling behaviour were observed due to increased water concentration in the furnace atmosphere from 14 to 52 mol%. Breakaway oxidation and nodule formation were evident with increased water concentration. Possible causes for the noticeable breakaway oxidation are long holding times, depletion in chromium and thereby formation of an Fe-rich outer oxide scale. Inward and outward growing oxides caused a small increase of the pickling time of EN 1.4307 tubes when pickled a in mixed acid of HNO3 and HF. The flameless oxyfuel burners showed a very high heat transfer due to increased contents of CO2 and H2O in the furnace atmosphere. Thereby, the heating time for the tube material can be decreased with up to 30%.