The mechanical properties of shot- and laser-peened austenitic stainless steels, AISI316, were evaluated via Vickers hardness tests, and the correlation between workhardening and microstructural characteristics were discussed. Dislocation density, which is a microstructural feature, was determined via X-ray line profile analysis. Martensite was generated only by the shot-peening process. A linear relationship is observed between the hardness and the square root of the dislocation density in spite of the martensite formation on the shot-peened specimen. Therefore, the hardness is increased only by workhardening and is not affected by the martensite. We also clarified that a compressive residual stress greater than the original yield strength of the bare material can be induced because of the increase in yield strength caused by workhardening due to dislocation density increase with the peening process.