In this study, the effect of the mechanical stability of residual austenite in a carburizing layer on the wear performance was explored. First, different amounts of residual austenite were obtained by quenching and cooling 23CrNi3MoA steel after carburization. The effects of the volume fraction, size, and distribution of the residual austenite on the stability and wear performance were investigated. Second, scanning electron microscopy (SEM), transmission electron microscopy (TEM), focused ion beam (FIB), and electron backscatter diffraction (EBSD) analyses were used to characterize the severely deformed layer under friction. In addition, the impacts of the size, morphology, content, and distribution of residual austenite on the wear performance were analyzed. The final results indicated that as the k of the residual austenite decreased, the wear performance of the sample first increased and then decreased. The wear performance improved due to the reduced stability of the residual austenite, which facilitated phase transformation of the residual austenite under friction. The phase transformation of residual austenite into martensite increased the hardness of the wear surface layer. In addition, nanotwinned martensite formed in the severe wear deformation layer. The generation of nanotwins could effectively hinder dislocation movement and store high-density dislocations near the twin boundaries, thereby improving the strength of the wear layer and reducing the wear rate. However, when the residual austenite stability continued to decrease, a large amount of block-like austenite at the grain boundaries underwent excessive plastic deformation during friction. This excessive plastic deformation increased the number of dislocations and led to incoordination between the phase-transformed martensite and the original martensite during deformation. Therefore, crack nucleation increased, and crack propagation accelerated, directly increasing the amount of wear on the wear surface and decreasing the overall wear resistance of the material. In this article, the wear mechanism of residual austenite during dry sliding friction was elucidated, and a basis for reasonable control of residual austenite in production work was provided.