Use of Tungsten Inert Gas (TIG) arcing processing for surface modification of AISI 4340 structural steel has been studied. The surface modification of base material has been characterised by its tensile and fatigue properties under uniaxial loading and correlated to the change in microstructure and hardness as a function of the TIG arcing process parameters such as arcing current and arc travel speed affecting the heat input (HI). The microstructural investigation carried out by optical microscopy gives clear evidence of martensite and bainite transformations in the matrix at different proportion depending upon processing parameters, which promotes significant improvement in its hardness. Thus the tensile and fatigue properties were found to be significantly affected by the TIG arcing process, which may be desirably controlled by appropriate selection of HI at favourable conditions of arcing current and arc travel speed at a given arc voltage of 10.5 ± 1.0 V. In this context the influence of TIG arcing process on residual stresses generated in the matrix has also been studied and its influence on fatigue properties has been discussed.