Abstract In the past decade, several near-neutral pH external circumferential stress corrosion cracking (C-SCC) were found in various pipelines, and some features have led to in-service or hydrostatic test leaks. Previous studies have emphasized the significant role of stress in the integrity management of C-SCC, primarily in two aspects: i) the initiation and propagation of C-SCC, and ii) the burst and fitness for service (FFS) assessment of known C-SCC features. Earlier research revealed that most C-SCC colonies were located near the top or bottom of the pipe, often associated with vertical field bends or local deformation at the bottom of the pipe, and often they are found on slopes. The mechanisms of stress corrosion cracking suggest that axial stress must surpass hoop stress for cracks to align in the circumferential direction. Historically, the sources of axial stress were identified as geohazard-induced axial stress, pressure-induced axial tension, or cross-sectional or local deformation. However, stress analysis on several recently discovered C-SCCs in operational natural gas pipelines revealed low global axial stress at these locations. This finding, confirmed by the observation of minimal or no movement during cut-out, necessitates a better understanding of additional axial stress sources, such as surficial residual stress at these locations. In this study, detailed electron microscopy characterization was carried out on pipeline sections containing developed C-SCC. Advanced microscopy using focused ion beam (FIB) and S/TEM (scanning transmission electron microscopy) revealed that the formation of SCC is closely related to development of cracking/corrosion on cementite precipitates at the grain boundaries. Through thickness residual stress measurement and mapping were performed using high energy Synchrotron x-ray diffraction on both cracked and non-cracked pipe sections cut from in-service natural gas pipelines. The test results suggest high residual stress with substantial amplitude variation existed in the pipeline that had C-SCCs formation.