The characteristics of residual stresses occurring in PM steel based nickel (FLN2-4405) was investigated. Residual stresses were measured by electrochemical layer removal technique. The values and distributions of residual stresses occurring in PM steel processed under various densities (6.8, 7.05, 7.2 and 7.4 g/cm3) and heat treatment conditions (sintered at 2050 ºF, sintered at 2300 ºF, quenching-tempered, and sinter-hardened) were determined. In most of the experiments, tensile residual stresses were recorded on the surface of the samples. The residual stress distribution on the surface of the PM steels was found to be affected by the heat treatment conditions and density. The maximum values of residual stresses on the surface showed sinter hardened condition and a density of 7.4 g/cm3. The minimum level of recorded tensile residual stresses are150 MPa and its maximum level is 370 MPa.