Grinding hardening (GH) is a common processing method and pre-stressed hardening grinding (PSHG) is presented combined with the advantages of grinding hardening and pre-stress grinding. In order to study their hardening and transformation mechanism, the paper carried on the GH and PSHG experiments. According to the results, the hardening mechanism in GH was reanalysed through the point of classical nucleation theory. And the coupling relationship of stress, temperature and microstructure in PSHG is studied as well. The study shows: the dislocation in the grinding area compensates the negative factors of cooling speed during GH, so the hardening effect is remarkable. In PSHG, the parent-phase-hardening and strain-inducing-phase-changing due to applying pre-stress have comprehensive effect on the martensitic phase transformation in the grinding process. The characteristic of microstructure in hardening layer can be controlled by applying different pre-stress in PSHG.