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Additive manufacturing (AM) provides exceptional geometrical freedom to the architects and designers and enables the construction of architecturally exposed steel structures. However, the AM structural elements inherently possess microscale defects that can affect their ductility. This study aims to identify the fracture-initiating mechanism in AM 17-4 stainless steel that is popularly used owing to its excellent engineering properties. To this end, axisymmetric cylindrical notched and unnotched tension specimens are manufactured employing direct metal laser sintering from 17-4 stainless steel powder with established processing and build parameters. The test specimens were manufactured using a 90° build orientation with the build plate and a layer thickness of 40 μm. Postprocessing heat treatment was avoided as the study focused on understanding the failure mechanism in as-built AM test specimens. Detailed metallurgical analysis is performed employing scanning electron microscopy (SEM) and electron backscatter diffraction. Subsequently, micro–computed tomography (CT) studies are conducted on the tension specimens before and after mechanical testing. Although the SEM analyses of fracture surfaces are inconclusive, the micro-CT analysis revealed evidence of nucleation of new microvoids, growth of existing voids, and void coalescence in the vicinity of the fracture surface, which is unequivocal evidence for ductile fracture. Furthermore, the larger AM defects were found to play an important role in lowering the ductility in addition to stress concentration, and the fracture was initiated when the AM defects coalesced over a length of around 600 μm. The conclusions of this study emphasize the importance of controlling the maximum size of defects in AM structural elements to improve their performance.