Abstract In order to investigate the influence of shot peening on microstructure of laser hardened steel and clarify how much influence of initial microstructure induced by laser hardening treatment on final microstructure of laser hardened steel after shot peening treatment, measurements of retained austenite, measurements of microhardness and microstructural analysis were carried out on three typical areas including laser hardened area, transitional area and matrix area of laser hardened 17-4PH steel. The results showed that shot peening was an efficient cold working method to eliminate the retained austenite on the surface of laser hardened samples. The surface hardness increased dramatically when shot peening treatments were carried out. The analyses of microstructure of laser hardened 17-4PH after shot peening treatment were carried out in matrix area and laser hardened area via Voigt method. With the increasing peening intensity, the influence depth of shot peening on hardness and microstructure increased but the surface hardness and microstructure did not change when certain peening intensity was reached. Influence depth of shot peening on hardness was larger than influence depth of shot peening on microstructure due to the kinetic energy loss along the depth during shot peening treatment. From the microstructural result, it can be shown that the shot peening treatment can influence the domain size and microstrain of treated samples but laser hardening treatment can only influence the microstrain of treated samples.