This study investigates the effect of high current density electropulsing on the material in a rapid stress relaxation process. An AISI 1020 steel was shot-peened to induce surface compressive residual stresses in a controlled manner and subsequently electropulsed to investigate the changes in microstructure and defect configuration. AISI 1020 steel was chosen as it has a simple microstructure (plain ferritic) and composition with low alloying conditions. It is an appropriate material to study the effect of transmitting electric pulses on the microstructural defect evolution. A combination of electron-backscattered diffraction and transmission electron microscopy proved to be an effective tool in characterizing the post-electro pulsing effects critically. By application of electropulsing, a reduction in the surface residual stress layer was noticed. Also, reductions in misorientation and dislocation density together with the disentanglement of dislocations within the cold-worked layer were observed after electropulsing. Additionally, the annihilation of shot-peening-induced deformation bands beyond the residual layer depth was observed. These effects have been rationalised by taking into account the various possibilities of athermal effects of electropulsing.