Abstract: Simulation of laser shock peening with one round gauss-spot was carried out by ABAQUS FEM software. A residual stress hole phenomena in the material surface was detected. The formation mechanism of residual stress hole was explained via analyzing the dynamic mechanics response of the material in the spot center. The results indicate that intense shear stress is generated during the loading of laser-induced shock wave, and rarefaction wave and shear wave are formed. Rarefaction wave spreads all around in the material surface and shear wave propagates inward. When the ambient rarefaction waves meet and converge in the spot center, the material rises and falls sharply and secondary plastic deformation is generated. Because of the secondary plastic deformation, a large shear plastic stain is formed and the axial and radial plastic strain which were formed under the laser-induced shock wave, are greatly reduced. After the secondary plastic deformation, the residual stress reducing in the spot center results in the residual stress hole.