In this paper the fatigue life of spur gear was investigated by changing the shot peening condition. From bending fatigue test depending on various shot peening intensity, fatigue characteristics were investigated. The causes of reduction in fatigue life were analyzed by observing the surface of gear with Scanning Electron Microscope(SEM), and impact of residual stress to fatigue characteristics was identified by measuring compressive residual stress depending peening intensity by depth. The results show that the optimum shot ball velocity is 65 m/s and optimum peening time is 8 minutes. From SEM image, the micro-crack was observed at the surface in case of over peening. This seems to be the factor which reduces fatigue life by decreasing compressive residual stress of surface.