Pseudospark electron beam is a kind of high-current pulsed electron beam. It is characterized by high current (hundreds of amperes to thousands amperes), short pulse duration (hundreds of nanoseconds to thousands nanoseconds), high frequency (hundreds Hz to thousands Hz) and self-focused beam diameter (typically 0.5-5 mm), which are more favorable for metal surface treatment compared with the conventional thermal-emission electron beam diode. The pseudospark electron beam is easy to achieve high rate of beam energy rise, plasma quenching and to obtain fast and stable repetitive operation. Some unique properties of material processing applications have been induced by the pseudospark electron beam treatment. In this paper, the mechanism and microstructure modification of AISI1045 steel by pseudospark electron beam surface treatment have been investigated. Surface microstructure and chemical composition of AISI 1045 steel pre and post pseudospark electron beam treatment are investigated by using scanning electron microscope (SEM), electron back-scattered diffraction (EBSD) and transmission electron microscope (TEM). Results show that the average depth of the treated layer is several microns. The melt interface is not straight, indicating a non-uniform melting process. Besides, material’s grain size is significantly reduced after pseudospark treatment, especially in sublayer. The average grain size in the sublayer is smaller than in the top-layer. The relatively finer grain size in the sublayer is attributed to the temperature-induced dynamic thermal stress fields and the highest temperature gradient in the subsurface layer instead of on the top layer. Furthermore, the amorphous phase is observed on the surface of melted layer.