In this study, the effects of portable pneumatic needle-peening (PPP) on the bending fatigue limit of a low-carbon steel SM490A welded joint containing a semi-circular slit on the weld toe were investigated. PPP was applied to the specimens with a semi-circular slit with depths of a = 0.4, 0.8, 1.2, and 1.6 mm. Then, three-point bending fatigue tests were carried out under R = 0.05. The fatigue limits of low-carbon steel welded specimens containing a semi-circular slit were increased for peened specimens compared with non-peened specimens. Peened specimens having a semicircular slit with a depth of a = 1.2 mm had high fatigue limits, almost equal to those of the non-slit peened specimens. It was concluded that a semi-circular slit with a depth of less than a = 1.2 mm can be rendered harmless by peening. Then, the fatigue improvement by peening was predicted. The fatigue limits before and after peening could be estimated accurately by using a modified Goodman diagram considering the effects of residual stress, stress concentration, and Vickers hardness. Moreover, the maximum depth of a semi-circular slit that can be rendered harmless by PPP was estimated based on fracture mechanics assuming that the semi-circular slit was equivalent to a semi-circular crack. The prediction results were almost consistent with the experimental results.