Surface hardening by laser or electron beam is due to the rapid heating and cooling rates, which are caused owing to the localized heating produced by high power density beams. The quantity of energy required for hardening is so small that the thermal distortion generated in the workpiece is little. The paper deals with surface hardening of carbon steel by a newly developed small diameter nozzle plasma arc machine which produces power density of about 106 W/cm2 at the exit of the nozzle. Carbon steel of S 45C is hardened with the width of about 0.8 mm and depth of about 0.1 mm and Vickers hardness of about 1000 is obtained under working conditions of arc voltage of 43.5V, arc current of 12A and moving speed of workpiece of 3m/min. The hardening capability is the same as that of laser or electron beam. The spreading of plasma arc beam was also discussed. The absorbed power density on the workpiece surface is estimated to be about 104 W/cm2, which is obtained from heat conduction theory and experimental width of hardened region.