A process is proposed for integrating the laser-assisted machining (LAM) and laser surface heat treatment (LSHT) in a single operation. Experimental and numerical investigations were carried out. LSHT tests were performed to investigate the effect of the process parameters on the microstructure evolution and hardenability. A methodology and an empirical model for prediction of hardened depth were proposed. A two-dimensional finite element (2D-FE) model was developed to predict the phase transformation during the LAM and LSHT processes. The optimization of the LAM process was also investigated using the developed finite element model.