Laser shot peening (LSP) and tensile fatigue test are carried out on AZ31B magnesium alloy samples with center hole. The surface integrity is compared before and after LSP, which indicates that plastic deformation is induced by slip and twinning after LSP, the micro-hardness along surface and depth direction increases by about 50%, while the surface residual compressive stress value reaches to -126.29 MPa, and grain is refined since a large number of slip lines and twins appear. Fatigue performance is analyzed by testing axial force and axial displacement, meanwhile fatigue fracture is compared before and after LSP. No obvious source of fatigue crack is found on the surface after LSP, the actual stress intensity factor of crack tip is reduced by residual compressive stress, thereby fatigue crack initiation and propagation resistance is improved. Fatigue crack growth path is more tortuous than untreated pieces. Dimple size of final breaking zone is larger and deeper than untreated pieces, which indicates that the plastic has been improved after LSP.