Friction stir welding (FSW) is a solid-state joining process capable of producing high-quality joints with low distortion and excellent mechanical properties. However, due to the high process temperatures required for stainless steels, considerable residual stresses and distortion may still develop during welding. In this study, the effect of preheating temperature on the temperature distribution, residual stresses, and distortion during FSW of SUS304 stainless steel was numerically investigated using a coupled thermo-mechanical finite element model developed in ABAQUS. A user-defined DFLUX subroutine was implemented to simulate the moving heat source, and four preheating temperatures (25, 100, 200, and 300 °C) were evaluated. The numerical model was validated against published experimental data, showing good agreement in terms of temperature history and residual stress distribution. The results indicate that increasing the preheating temperature has only a limited effect on the peak welding temperature but significantly reduces thermal gradients within the workpiece. Furthermore, the elevated temperature decreases the yield strength of SUS304, promoting plastic deformation during welding and consequently reducing the accumulation of residual stresses after cooling. At a preheating temperature of 300 °C, the average longitudinal residual stress decreased by approximately 79.4% compared with the non-preheated condition. In addition, workpiece distortion was noticeably reduced while the peak temperature remained below the melting point of SUS304, confirming that the process retained its solid-state nature. These findings demonstrate that preheating is an effective approach for improving the thermo-mechanical performance of friction stir welded SUS304 stainless steel.