The effect of annealing on residual stress and dislocation propagation in silicon slices with a damaged layer induced by diamond scribing, laser scribing and diamond blade cutting was studied by infra-red photoelastic measurements and dislocation pit observations. Residual stress and dislocation propagation both showed clear annealing temperature dependence at temperatures above 500 ~ C, although the residual stress was greatly reduced by a small degree of dislocation propagation. The experimental results can be explained using the stress recovery theory by the model of the damaged layer with a mosaic crystal layer and a single crystal layer with micro-cracks and dislocations.