This study investigates the effects of laser shock peening (LSP) on the microstructural evolution and surface hardening of MAR-M247 nickel-based alloy. Experimental and numerical simulation methods are employed to analyze the influence of pulse power density and spot size. The results demonstrate that LSP significantly enhances surface hardness and yield strength. As the pulse power density increases, the magnitude and depth of plastic deformation increase. Higher power densities can implant deeper and greater compressive residual stress (CRS), but the corresponding tensile residual stress (TRS) also increases. Reducing both power density and spot size decreases the amount of plastic deformation of the surface. However, decreasing the spot size results in a decrease in the depth of the CRS. On the other side, based on the analysis of the microstructure, during the process of LSP, many dislocations accumulate in the γ matrix and evolve into subgrain boundaries, resulting in grain refinement. Additionally, LSP induces the precipitation of nanoscale carbides. This study tries to establish the influence law and action mechanism between LSP process-material property-microscopic evolution, which provides theoretical and applied data support for engineering applications.