Laser based heat treatments have multiple applications for local tuning of microstructures. They are particularly relevant in the context of laser-based additive manufacturing (LAM), in order to relieve residual stresses or introduce equiaxed structures through recrystallization. In 316L, high stored energy inherited from the high cooling rates of laser processing creates strong crystallographic textures and stable cellular walls, which challenges the possibility of inducing fast recrystallization. In a first step, we perform here a laser heat treatment on a highly deformed 316L steel, and show that in-situ X-ray Diffraction (XRD) is a viable tool for the monitoring of fast recrystallization. The evolution of Bragg peak width over time is connected to the evolution of dislocation density and grain size, thanks to Electron Back-Scattered Diffraction (EBSD) and Transmission Electron Microscopy (TEM) characterization. X-ray signals are shown to reveal different stages of recrystallization, in particular the development of dislocation cells and the onset of nucleation. This study also demonstrates how local heat sources such as lasers may help designing composite-like materials for grain size, texture and hardness optimization.