Surface severe plastic deformation (S2PD) techniques such as surface mechanical attrition treatment (SMAT) allow processing of metals to form a gradient of stored deformation energy and microstructure. Though strengthening of S2PD metals has been investigated in the literature, little information is available on the influence of subsequent annealing on microstructure and mechanical property evolution of the S2PD metals. Here, the SMAT process of Cu followed by heating at temperatures of 175 °C, 225 °C and 275 °C for 1 h is performed. Scanning electron microscopy (SEM) and electron backscatter diffraction (EBSD) are utilized to investigate microstructural evolution at different depths from the treated surface. To evaluate the spatial distribution of hardness, cross-section microhardness measurements are incorporated. The stored gradient of deformation has caused a reduction in the recrystallization temperature of the SMAT treated Cu, and following the annealing, microstructural evaluation reveals a recrystallized layer near the treated surface, the depth of which increased with a higher annealing temperature. Uniaxial tension testing is utilized to analyze the mechanical properties of the SMAT processed and annealed specimen, and a substantial increase in uniform elongation is observed with the 225 °C and 275 °C heat-treated specimens when compared to the as-SMAT processed state. This increase in uniform elongation is attributed to extra work-hardening rate due to the higher dislocation storage capacity of the recrystallized layer. This study shows that with annealing after SMAT, modulated grain structure gradients can be obtained. The strength-ductility combinations of the material can be flexibly altered in order to adapt to different applications with different mechanical property requirements by using different annealing parameters.