The laser surface hardening process will enhance the hardness profile of automotive components and ensure better process control and predictability of quality as compared to the conventional hardening processes. A 2KW Nd-YAG laser system was used to harden the surface of alloy steel with various process parameters (laser power, focal spot diameter and beam velocity). The results (microhardness, microstructure change and residual stress distribution) were measured and analyzed with Vickers microhardness tester, optical/electron microscope and hole-drilling residual stress equipment. Statistical analyses of the experimental data were used for explaining the relationships between process parameters, microhardness and microstructure. General thermal hardening was applied in the research to show the influence of heating temperature and cooling method on microstructure and mechanical properties. Also, the results were compared with laser surface hardening process from microhardness, microstructure and residual stress to show the advantage of laser surface hardening. Through analysis of the results of the laser surface hardening experiments, a suitable laser power density and interaction time for optimum hardening was obtained. The presented laser surface hardening process can also be applied to other alloy steel surface hardening process.