With laser beam heating it is possible to obtain a precisely controlled hardening area, in which the process parameters and material properties are important for the hardened area and deformed surface shape. In this study, the transient heat flow, thermal stress and deformed shape during laser surface hardening of the piston ring groove of a ship's engine were analysed by a finite element method. Using a modified two-dimensional finite element model, the heat-affected zone (HAZ) sizes and the deformed shapes in laser surface hardening were successively calculated. The effects of the process parameters and material properties on the deformed shape of the hardened part were investigated by using 2(n-1) fractional factorial design. The simulation results revealed that the process parameters such as laser power and traverse speed had a greater influence on the deformed shape of the surface-hardened part than the physical properties of the base metal. The displacement of the hardened surface was determined mainly by the bending and bulging phenomena which were due to the temperature gradient and martensitic phase transformation; the bending effect played a more important role than the bulging effect. Tensile residual stress occurred in the hardened area, while the maximum compressive residual stress occurred under the boundary of the hardened zone.