In this study, stress shot peening (SP) treatments were implemented on the austenitic and ferritic stainless steel. The surface layer characteristics including residual stress states and microstructures of the treated material were investigated by X-ray diffraction (XRD) and transmission electron microscopy (TEM) methods. The stress analysis results showed that stress SP generated a thicker surface region with higher compressive residual stress than conventional SP, and the variations of residual stresses were tightly associated with the level and direction of the preloading. The microstructural evolutions determined by Rietveld refinement demonstrated that stress SP promoted the plastic deformation and conferred more refined crystallite and higher lattice distortion into the material. TEM observations confirmed that severely deformed microstructures characterized by higher density dislocations and smaller subgrains or grains were formed in the samples with stress SP. Moreover, the experimental results suggested that the plastic deformation was inhomogeneous within the two phases, and austenite suffered more changes in microstructure than ferrite during plastic deformation. It was concluded from the present study that stress SP was more potent in inducing compressive stress, microstructure refinement and work hardening in the surface layer of the duplex alloy than conventional SP.