Laser peening uses the dynamic mechanical effects of a shock wave imparted by a laser to modify the surface of a target material. It does not utilize thermal effects. Fundamentally, laser peening can be accomplished with only two components: a transparent overlay and a high-energy pulsed laser system. The transparent overlay confines the plasma formed at the target surface by the laser beam. It is also often beneficial to use a thin overlay, opaque to the laser beam, between the water overlay and the target surface. This opaque overlay can provide either or each of three benefits: protect the target surface from potentially detrimental thermal effects from the laser beam, provide a consistent surface for the laser beam-material interaction and, if the overlay impedance is less than that of the target surface, increase the magnitude of the shock wave entering the target. However, there are situations where an opaque overlay is not used; in the Toshiba process, LPwC, or where the tradeoff between decreased cost and possibly somewhat lowered surface residual stress allows superficial grinding or honing after laser peening to remove the thin thermally effected layer.
The laser peening process originated with high-energy Nd-glass lasers producing pulse energies up to 50 J (more commonly 5 to 40 J) with pulse durations of 8 to 25 ns. Laser spot diameters on target are typically in the range of 2 to 7 mm. The processing sequence begins by applying the opaque overlay on the workpiece or target surface. Commonly used opaque overlay materials are black or aluminum tape, paint or a proprietary liquid, RapidCoater. The tape or paint is generally applied over the entire area to be processed, while the RapidCoater is applied over each laser spot just before triggering the laser pulse. After application of the opaque overlay, the transparent overlay is placed over it. The transparent overlay used in production processing is water; it is cheap, easily applied, readily conforms to most complex surface geometries, and is easily removed. It is applied to the surface just before triggering the laser pulse. Quartz or glass overlays produce much higher pressures than water, but are limited to flat surfaces, must be replaced after each shot and would be difficult to handle in a production setting. Clear tape may be used, but requires labor to apply and is difficult to conform to complex surface features.  The transparent overlay allows the laser beam to pass through it without appreciable absorption of the laser energy or dielectric breakdown. When the laser is triggered, the beam passes through the transparent overlay and strikes the opaque overlay, immediately vaporizing a thin layer of the overlay material. This vapor is trapped in the interface between the transparent and opaque overlays. The continued delivery of energy during the laser pulse rapidly heats and ionizes the vapor, converting it into a rapidly expanding plasma. The rising pressure exerted on the opaque overlay surface by the expanding plasma enters the target surface as a high-amplitude stress wave or shock wave. Without a transparent overlay, the unconfined plasma plume moves away from the surface and the peak pressure is considerably lower. If the amplitude of the shock wave is above the Hugoniot Elastic Limit (HEL), i.e., the dynamic yield strength, of the target, the material plastically deforms during passage of the shock wave. The magnitude of the plastic strain decreases with distance from the surface as the peak pressure of the shock wave attenuates, i.e., decreases, and becomes zero when the peak pressure falls below the HEL. After the shock wave passes, the residual plastic strain creates a compressive residual stress gradient below the target surface, highest at or immediately below the surface and decreasing with depth. By varying the laser power density, pulse duration, and number of successive shots on an area, a range of surface compressive stress magnitudes and depths can be achieved. The magnitude of surface stresses are comparable to shot peening, but the depths are much greater, ranging up to 5 mm when using multiple shots on a spot. Generally spot densities of about 10 spots/cm to 40 spots/cm are applied. The compressive stress depth achieved with the most common processing parameters ranges from  deep. The deep compressive stresses are due to the shock wave peak pressure being maintained above the HEL to greater depths than for other peening technologies.
There may be instances where it is cost effective not to apply the opaque overlay and laser peen the bare surface of the work piece directly. When laser peening a bare, metallic surface a thin, micrometer-range, layer of surface material is vaporized. The rapid rise in temperature causes surface melting to a depth dependent on pulse energy and duration, and target melting point. On aluminum alloys this depth is nominally 10–20 μm, but on steels and other higher melting point alloys the depths may be just a few micrometers. Due to the short duration of the pulse, the in-depth heating of the surface is limited to a few tens of micrometers due to the rapid quenching effect of the cold substrate. Some superficial surface staining of the work piece may occur, typically from oxidation products. These detrimental effects of bare surface processing, both aesthetic and metallurgical, can be removed after laser peening by light grinding or honing. With an opaque overlay in place, the target surface experiences temperature rises of less than  on a nanosecond time scale.
Laser pulses are generally applied sequentially on the target to treat areas larger than the laser spot size. Laser pulse shapes are customizable to circular, elliptical, square, and other profiles to provide the most convenient and efficient processing conditions. The spot size applied depends on a number of factors that include material HEL, laser system characteristics and other processing factors. The area to be laser peened is usually determined by the part geometry, the extent of the fatigue critical area and considerations of moving the compensating tensile stresses out of this area.
The more recently developed laser peening process, the Toshiba LPwC process, varies in significant ways from the process described above. The LPwC process utilizes low-energy high-frequency Nd-YAG lasers producing pulse energies of  and pulse durations of , using spot sizes  diameter. Because the process originally was intended to operate in large water-filled vessels, the wave frequency was doubled to halve the wavelength to 532 nm. The shorter wavelength decreases the absorption of beam energy while traveling through water to the target. Due to access constraints, no opaque overlay is applied to the target surface. This factor, combined with the small spot size, requires many shots to achieve a significant surface compressive stress and depths of 1 mm. The first layers applied produce a tensile surface stress due to surface melting, although a compressive stress is developed below the melt layer. However, as more layers are added, the increasing subsurface compressive stress "bleeds" back through the melted surface layer to produce the desired surface compressive stress. Depending on material properties and the desired compressive stresses, generally about 18 spots/mm to 70 spots/mm or greater spot densities are applied, about 100 times the spot densities of the high-pulse-energy process. The effects of the higher spot densities on processing times are compensated for in part by the higher pulse frequency, 60 Hz, of the low-energy lasers. Newer generations of these laser systems are projected to operate at higher frequencies. This low-energy process achieves compressive residual stress magnitudes and depths equivalent to the high-energy process with nominal depths of . However, the smaller spot size will not permit depths deeper than this.