Water cavitation peening (WCP) with aeration is a recent promising method in the surface enhancement technique, which can induce compressive residual stress in the near surface of mechanical components by the bubble collapse on the surface of components in the similar way as conventional shot peening. In this paper, the effect of WCP on fatigue crack growth behavior was investigated in single-edge-notched flat tensile specimens of S45C steel. The notched specimens were treated by WCP, and the compressive residual stress distributions in the near surface layer were measured by X-ray diffraction method. The tension-tension (R = Smin/Smax = 0.1, f = 10 Hz) fatigue tests were conducted. A Shimadzu servo-hydraulic fatigue test machine with in-situ observation by JSM-5410LV scanning microscope was used for all testing. Compared with those without WCP treatment, WCP can induce the residual compressive stress in the near surface layer, and delay the fatigue crack initiation, and decrease the rate of fatigue crack growth.