In this work, the influences of laser shock peening (LSP) on the residual stress state, microstructures and mechanical properties of Ti-6Al-4V alloy fabricated by selective laser melting (SLM) were researched. Particularly, the microstructural evolution before and after LSP was clarified using electron backscatter diffraction (EBSD) and transmission electron microscopy (TEM) observations. The results showed that the residual stress was adjusted from tensile to compressive state. Furthermore, high-density dislocations and a great number of parallel nano mechanical twins (nano-MTs) were promoted in the coarse lamellar α' structures, contributing to the grain refinement. The ultimate tensile strength and elongation of the SLM-manufactured (SLMed) Ti-6Al-4V alloy increased by approximately 14.3% and 18.3% after LSP treatment, respectively. Finally, the dominant mechanism of tensile property enhancement by LSP was revealed. High levels of compressive residual stress and grain refinement of the α' structures induced by LSP realized the excellent combination of strength and ductility.