Machine hammer peening (MHP) is a novel surface modification process that can strengthen and smoothen the treated parts in one process, significantly improving their fatigue performance. The strengthening effect is mainly due to the induced highly controllable residual compressive stress on the subsurface. However, the residual compressive stress induced by MHP is usually anisotropic, with the component perpendicular to the feed direction more significant than parallel.The anisotropic residual stress will have an adverse effect if the treated parts are subjected to multiaxial loads, which puts forward high demands to precisely tune such anisotropy. For this purpose, a finite element model with a velocity-based driving mode is first established in this paper, which can simulate the residual stress induced by MHP. The origin of the anisotropy is then revealed by analyzing the evolution of the simulated residual stress. Based on this, methods to precisely tune the residual stress anisotropy are proposed. The residual stress anisotropy can be precisely tuned by optimizing MHP parameters, including the overlap ratio, impact velocity, and MHP path.