Cavitation peening (CP), which utilises the impact caused by cavitation bubbles collapsing, can improve the fatigue strength of metallic materials as well as the yield stress and tensile strength. The rotor cores in interior permanent magnet motors use electrical steel sheet. In order to increase the permissible rotating speed of the motor and achieve high efficiency, the mechanical strength of the stress concentration area in the steel sheet where the magnet is pressed needs to be enhanced. In the present paper, to improve the yield stress and tensile strength, the steel sheet was peened by CP. The peening effect on these mechanical properties was evaluated by tensile and indentation tests. The experimental results from the tensile tests revealed that CP can increase the yield stress by 22% compared to that before CP. In addition, the yield stress and tensile strength increased along with the CP processing time. © 2011 Institute of Materials, Minerals and Mining.