This study examines the influence of high-energy laser shock peening (LSP) using 7 J and 10 J pulse energies on the sub-surface deformation characteristics of Inconel 718 superalloy. High-magnitude compressive residual stresses were induced into the samples after LSP with large residual stress depths of the order of 2 mm – the experimental observations were in good agreement with finite element analyses of the LSP process. The propagation of intense shock waves led to an increased strain hardening and dislocation densities that were experimentally quantified by synchrotron diffraction and transmission electron microscopy. Microscopic analyses revealed highly refined grain structure only at the surface without much refinement observed in the residual depth region. Alongside high degree of strain hardening, a profuse amount of adiabatic shear bands was observed in the hardened depth, indicative of simultaneous strain localisation under such high laser pulse energy. These bands occurred along common slip planes in the Ni γ-matrix and could be potential areas of instability leading to failure. The LSP-treated samples exhibited improved corrosion resistance, with higher laser pulse energy peened samples performing better.