Laser shock peening (LSP) under water confinement regime involves several complicated physical phenomena. Among these phenomena, the interaction between laser and coating material during LSP is very important to the laser-induced residual stress, which has an important effect on the fatigue and corrosion properties of the substrate material. To gain a better understanding of this interaction, a series of experiments, including single shot, single-track overlapping, and multitrack overlapping LSP, has been carried out on various metals with different coatings. A 3D finite element model has also been developed to simulate the LSP process. Combining this with a previously developed confined plasma model, which has been verified by the experimental data from literature, the 3D finite element model is used to predict the residual stresses induced in the substrate material as well as the indentation profile on the substrate surface. The model prediction of indentation profiles is compared with the experimental data. The residual stresses in the depth direction are also validated against the X-ray diffraction measurement data for 4140 steel and Ti–6Al–4V, and good agreements are obtained for both predictions. The effect of process parameters on the residual stress is also investigated both experimentally and theoretically.