Recently, stress corrosion cracking (SCC) has been observed near the welded zone of the primary loop recirculation pipes made of low-carbon austenitic stainless steel type 316L in boiling water reactors. SCC is initiated by superposition effect of three factors. They are material, environmental and mechanical factors. For non-sensitized material such as type 316L, residual stress as a mechanical factor of SCC is comparatively important. In the joining processes of pipes, butt welding is conducted after surface machining. Surface machining is performed in order to match the inside diameter and smooth surface finish of pipes. Residual stress is generated by both processes. Moreover, residual stress distribution generated by surface machining is varied by subsequent welding processes, and it has the maximum residual stress around 900 MPa near the weld metal. The variation of metallographic structure, such as recovery and recrystallization, in the surface machined layer due to the welding thermal cycle is an important factor for this residual stress distribution. In this study, thermal ageing tests were performed in order to evaluate hardness variation due to the thermal cycle in the surface machined layer. Results of thermal ageing tests were applied to the finite-element method as the additivity rule of the hardness variation. Varied hardness was converted into equivalent plastic strain. Then, thermo-elastic-plastic analysis was performed under residual stress fields generated by surface machining. As a result, analytical results of surface residual stress distribution generated by bead-on-plate welding after surface machining show good agreement with measured results by the X-ray diffraction method. The maximum residual stress near the weld metal is generated by the same mechanism as in the both-ends-fixed bar model in the surface machined layer that has high yield stress.