Ultrasonic peening treatment (UPT) as a method of severe plastic deformation was used to treat cruciform welded joints of Q345 steel. The application of UPT achieves material surface nanocrystallization of the peening zone, reduces stress concentration, and produces residual compressive stresses at the welded toe. Micro-structure, hardness, stress relief, S-N curve, and the fatigue fracture mechanism of cruciform welded joint of Q345 steel, both before and after UPT, were analyzed in detail. The main results show that: stress concentration and residual tensile stress are the main reasons to reduce fatigue strength of cruciform welded joints. The fatigue life of cruciform welded joints is improved for surface hardening, compressive stress, and grain refinement by UPT. Residual compressive stress caused by UPT is released with the increase of fatigue life. A very significant fatigue strength improvement happens when UPT is replenished repeatedly after a certain number of cycles.