In this study, the SAF 2507 duplex stainless steel was subjected to surface shot peening (SP) treatment. The characteristics of processed samples such as surface morphology, residual stress distribution and microstructure were analyzed by scanning electron microscopy, X-ray diffractometry and transmission electron microscopy techniques. Results showed that SP had deleterious side effect on the surface roughness. After SP, high compressive residual stresses were induced on surface layer of the SAF 2507 alloy. The maximum stresses located at subsurface were approximately -930 and -715 MPa in gamma and alpha phase. SP introduced satisfied surface nanocrystallization and microstructure refinement into the material. The minimum grain size located at the top surface was about 25 nm, the thickness of nanocrystalline layer with crystallites smaller than 100 nm reached to similar to 125 mu m. Moreover, a mass of dislocations and dislocation cells was formed in gamma phase, but was rarely observed in alpha phase. The quantified dislocation density at surface was about 2.29 x 10(15)m(-2) and 1.28 x 10(15)m(-)(2) in gamma and alpha phase, respectively. SP leaded to the martensitic transformation, and the transformation sequence was considered to be: gamma -> austenite twins -> alpha'-martensite. SP treatments resulted in work hardening and increased the microhardness of the near surface material, which was mainly ascribed to the grain refinement effects and the formation of the strain-induced alpha'-martensite.