The present study focused to the effect of ion nitriding on fatigue properties of eutectoid steel. Two different temperatures (550°C and 500°C) and two different types of specimens (smooth and notched ones) were used in this study to investigate the mechanism of modification. Residual stress and EPMA analysis were used to derive the quantity relationship among case depth, residual stress and fatigue strength. The results confirmed the efficiency of ion nitriding in improving the fatigue properties of eutectoid steel. Surface hardening, refined microstructure and compressive stress were the three main factors being responsible for the modification of fatigue properties.