This article provides a discussion on the analytical modeling and simulation of residual stress states developed in steel parts and the reasons for these varied final stress states. It illustrates how the metallurgical phase transformation of steel alloys can be applied in the simulation of induction hardening processes and the role of these phase transformations in affecting stress and distortion. Emphasis is placed on induction surface hardening, which is the main application of induction heating in steel heat treatment. The article concludes with examples of induction surface-hardened shafts and through-hardened shafts made of plain carbon steel, alloy steel, and limited hardenability steel.