This article deals with the effect of shot peening on crack growth in carburized gears. Since residual stress plays an important role in this analysis, an evaluation of the residual stress induced in a carburized gear tooth due to shot peening is presented first. It has been proposed on the basis of the assumption that the residual stress is caused by the difference of volume expansion between the case and the core, and the influence of both the reduction of retained austenite and the strain caused by shot peening are considered. The shot peening is fairly effective to the reduction of fatigue crack growth rate. The resistance to crack growth is demonstrated by the simulation of crack propagation in both the carburized gear and the shot-peened gear.