Several methods of fatigue life assessment have been proposed on the basis of damage mechanics. In this research, as-received and carburized test specimens are loaded by a pulsating test rig, and variation of elastic strain in fatigue process is measured by image processing. From the test result, damage accumulation in the test specimens is evaluated based on damage mechanics. This method is then applied to the evaluation of fatigue damage of carburized gears under cyclic loading and the prediction of residual life is discussed.