In order to investigate the effect of laser peening treatment on high cycle fatigue properties, rotating bending fatigue tests were carried out for laser peened gas-carburized SCM420H steel. In this study, two types of pulse laser oscillators such as conventional high power laser equipment and hand-held compact laser equipment were prepared to generate different residual stress distributions in specimens and the effectiveness of the hand-held laser oscillator was verified as a laser peening equipment. Fatigue test results showed that laser peening with the hand-held laser oscillator improved fatigue strength to the same extent as that with the high power laser oscillator. Since fatigue strength was correlated with hardness distribution and residual stress distribution, the fatigue limit was predicted using both distributions. The attenuation behavior of the residual stress was predicted from the hardness and used to estimate the fatigue limit. Although the hand-held laser peening imparted compressive residual stress only near the material surface, the fatigue limit was significantly improved. Furthermore, no fatigue failure occurred inside the specimens despite the application of stresses exceeding the local fatigue limit. This suggests that there is an unknown factor in the hand-held laser peening that suppresses fatigue crack initiation.