Effect of recrystallization on DZ4 directionally-solidified nickel-base superalloy was investigated both at room temperature and high temperature of 673K. In-situ SEM surface observation were performed. Experimental results reveal that the material performance is strongly influenced by surface recrystallization layer. All specimens were prepared under conditions of shot peening and 4h 1220°C high temperature annealing. Different shot peening pressure specimens have different recrystallization states. High shot penning pressure specimens have clear and straight grain boundaries and the grain size appears to be a little bit larger. Recrystallization state seems not only affect the fatigue life, but also the crack initiation pattern and crack initiation life. Low shot peening pressure specimens have much lower fatigue life which is around 8-10% of virgin one, and SEM Real-time observation reveals that channeling cracks initiated at the early stage of fatigue life. High shot peening pressure specimens have higher fatigue life comparing to low shot peening pressure specimens, although it’s almost half lower than the virgin one, and cracks initiated not until middle or latter stage of fatigue life. Crack initiation life is also much longer than those of low shot peening pressure. Low shot peening pressure specimens seems not fully recrystallized, and its grain boundaries are much fragile which is responsible for high density microcracks initiation, and finally leads to the failure. Further nano-indention experiments on surface recrystallized layers show that higher shot peening recrystallized layers have much lower elastic module, which may explain the longer crack initiation life.