Oxidation behaviors of TP304H and HR3C steels with and without shot peening were investigated at 650°C in water vapor. The oxide scales were studied with XRD, SEM and EDX. The results showed that the oxidation resistance of the steels was effectively improved by shot peening, especially for TP304H. The oxidation resistance of shot peened TP304H was even better than shot peened HR3C. The shot peening process produced an ultra-fine surface microstructure and plenty of slip bands which resulted in an enhanced Cr diffusivity to form Cr-rich oxides. The shot-peening process also induced martensite at the surface, which enhanced Cr diffusion and significantly affected the oxidation behavior of the TP304H steel.