Basic mechanisms of generating a surface modified layer formed by a previously developed atmospheric controlled IH FPP system, consisting of induction heating system and fine particle peening system, were investigated. Three types of specimen treated at 900°C in argon with Cr, Al 2 O 3 and Cu shot particles were prepared. Surface microstructures of the treated commercial grade pure iron were characterized with a scanning electron microscope (SEM), an energy dispersive X ray spectrometer (EDX) and an X ray diffraction analysis (XRD). When treatment was carried out using Cr particles, the transferred layer and the diffused layer of the shot particle element formed at the treated surface. This was because the radius of Cr atom was almost the same as that of the Fe, thus forming a solid solution in the substrate. Conversely, when the treatment was applied using chemically stable Al 2 O 3 particles, a transferred layer only was observed. In the case of Cu particles, adhesion occurred due to the low melting temperature of Cu particles, resulting in the formation of a thick adhesive layer such as that generated by thermal spraying. These results suggest that the characteristics of the modified layer, generated by the atmospheric controlled IH FPP treatment system, can be controlled by varying the shot particles and other processing parameters. (Received January 11, 2011; Accepted April 4, 2011) Keywords: surface modification, fine particle peening, induction heating, atmospheric control, induction heating fine particle peening (IH FPP) system