Laser heating of Inconel 718 alloy is considered and the resulting temperature and stress fields are predicted using the finite element method (FEM). An experiment is carried out to treat the alloy surface by a laser beam at high pressure nitrogen environment. The metallurgical and morphological changes in the irradiated region are examined using the Scanning Electron Microscope (SEM), optical microscope, and X-ray Diffraction (XRD). It is found that the surface hardness of the alloy improves after the laser heating process, which is due to the microstructural changes and gamma-phase nitride formation in the surface region. The maximum value of the residual stress predicted in the irradiated region is close to the yielding limit of the alloy. (C) 2010 Elsevier Ltd. All rights reserved.