In this study, the influence of welding parameters on the distribution of residual stress in magnetically impelled arc butt welded joints was investigated. As major contributing factors to the quality of weldments and residual stress, welding time and welding upsetting pressure were focal points of this work. Experimentally verified thermal-metallurgical and mechanical finite element model was used for conducting this purpose. The effects of phase change including volumetric phase change and transformation plasticity were considered in the numerical model. Based on the numerical simulation it was observed that for instance by increasing upset pressure from 0 to 130 MPa, axial residual stresses have reduced from −210 MPa to −119 MPa, while by increasing welding time from 4 to 6 s, these stresses have increased from −119 MPa to −138 MPa on the outer surface of the weld line.