Colossal N supersaturation of ferritic as well as austenitic stainless steels during low temperature gaseous nitridation treatments has lately gained much technological significance. However, available thermodynamic models to calculate the N paraequilibrium solubility limits have failed to explain the levels of colossal N supersaturation observed in several cases of nitrided ferritic/austenitic stainless steels. In this work, we show that consideration of N dissolution induced spinodal decomposition is essential in calculating the N paraequilibrium solubility limit for both ferritic and austenitic stainless steels. This modification in the thermodynamic model has led to the successful explanation of the thermodynamic cause for the colossal N supersaturation in ferritic and austenitic stainless steels. Available experimental observations in literature support the occurrence of spinodal decomposition.