This paper presents an evaluation method for thermal ageing of surface-modified layer by X-ray diffraction techniques. Test specimens with surface-modified layer were prepared through shot peening with two different processing degrees. Thermal ageing test was then carried out using these specimens. Lab X-ray in-situ measurement was applied to obtain dynamic behavior of compressive residual stress and full width at half maximum (FWHM) within surface-modified layer during thermal ageing test. After the tests, X-ray diffraction line profile analysis was also applied to characterize thermal ageing-induced evolution of microstructure, such as crystalline size and micro strain (plastic strain due to dislocation), within surface-modified layer. As the results, relaxation of compressive residual stress due to thermal ageing was correlated highly with reduction of micro strain. The quantitative relation between them was successfully established based on inherent strain theory. Thus, the evaluation method with X-ray diffraction techniques are expected to be useful for quantifying the stress relaxation and microstructure evolution within surface-modified layer during thermal ageing.