Austenitic stainless steel cannot be hardened by any form of heat treatment, in fact, quenching from 10000C merely softens them. They are usually cold worked to increase the hardness. Shot peening is a cold working process that changes micro-structure as well as residual stress in the surface layer. In the present work, the compressive residual stress and fatigue strength of AISI 304 austenitic stainless steel have been evaluated at various shot peening conditions. The improvement in various mechanical properties such as hardness, damping factors and fatigue strength was noticed. Compressive residual stress induced by shot peening varies with cyclic loading due to relaxation of compressive residual stress field. The consideration of relaxed compressive residual stress field instead of original compressive residual stress field provides reliable fatigue design of components. In this paper, the exact reductions in weight and control of mechanical properties due to shot peening process are discussed.