Using a three-dimensional crystal plasticity model for cyclic deformation of lath martensitic steel, a simplified scheme is adopted to simulate the effects of shot peening on inducing initial compressive residual stresses. The model is utilized to investigate the subsequent cyclic relaxation of compressive residual stresses in shot peened lath martensitic gear steel in the high cycle fatigue (HCF) regime. A strategy is identified to model both shot peening and cyclic loading processes for polycrystalline ensembles. The relaxation of residual stress field during cyclic bending is analyzed for strain ratios and for multiple realizations of polycrystalline microstructure. Cyclic microplasticity in favorably oriented martensite grains is the primary driver for the relaxation of residual stresses in HCF. For the case of , the cyclic plasticity occurs throughout the microstructure (macroplasticity) during the first loading cycle, resulting in substantial relaxation of compressive residual stresses at the surface and certain subsurface depths. The initial magnitude of residual stress is observed to influence the degree (percentage) of relaxation. Describing the differential intergranular yielding is necessary to capture the experimentally observed residual stress relaxation trends.