This paper describes the method of increasing the contact fatigue strength of materials intended for application in the production of gears. Investigations were carried out on 41CrAlMo7 grade steel (closest equivalent: Nitralloy 135M) by quenching and tempering or nitriding and double shot-peening. Special emphasis should be placed on the combination of nitriding and shot-peening technologies. Both nitriding and shot-peening were significantly modified and differ from the classical processes. Nitriding was carried out in a way preventing the formation of a compound surface layer formed by nitrides epsilon and gamma. Shot-peening was carried out as a double-stage operation with the help of a change of parameters. As a result of combining the modernized processes, a new technology was developed guaranteeing the possibility of attainment of the contact fatigue limit comparable with the limit obtained by carburizing or induction hardening. The paper describes the methodology and the experimental work, as well as the obtained values of contact fatigue strength. Other surface parameters are also given, such as roughness, hardness, state and distribution of residual stresses.