Residual stresses play an important role in the performance of materials and the components produced from them. All manufacturing processes introduce residual stresses. These stresses can have a positive effect, for example by increasing the fatigue limit in the case of compressive surface residual stresses. Layer removal by electrochemical machining (ECM) can be used for measurement of the residual stresses in the PM parts. The device removed the layers by aid of electrochemical machining for this purpose is designed and developed. The device setup for residual stress measurement is based to the changes on deformation quantity. Since ECM is a non-mechanical metal removal process, ECM is capable of machining any electrically-conductive material with attendant high removal rates, regardless of mechanical properties. In particular, the removal rate in ECM is independent of the hardness, the porosity and toughness of the PM parts being machined. The micro constituents in PM steels resulting from different processing routes exhibit different thermal and mechanical behavior. This will lead to the formation of residual stresses around these micro constituents. Here we give the results of the first work carried out on PM steels in relation to residual stress measurements by the electro-chemical layer removal technique. The device works as follows. As a layer of thickness is removed, a certain amount of stress is removed from the sample. Equilibrium is violated and the sample deforms elastically to compensate for the stress removed. This elastic deformation in the sample is measured by the linear displacement gauge. This gauge pushes on the end of sample and deformation is recorded by this gage. The linear gauge send a signal to a display and then to the data converter. As simultaneous, this signal sent to the computer from the data converter for further calculations by RS 232.