Gas nitriding is a common surface treatment practice to improve the wear resistance of AISI H13 hot extrusion die cavities. However, due to the presence of complex and sharp features of die cavities, it has been observed that nonuniform nitride layer develops in these regions. Moreover, the formation of compound layer in the surface vicinity of nitrided surfaces leads to the development of transformation-induced stresses. The present work presents the application of the phase field method in predicting the evolution of the nitride layers and associated residual stresses during the gas nitriding of AISI H13 tool steels. Nitriding process is modeled and simulated in line with experimental setup, which uses automated two-stage controlled nitriding process. Some representative samples having commonly used geometric features are manufactured and nitrided for validation purpose. Both experimental and numerical results are found in close agreement in terms of nitrogen concentration and corresponding microhardness profiles. The results show that high stresses are induced at the surface due to formation of the nitride layers, and these stresses are found to be higher at the sharp corners. In view of the current results, some process and design strategies are suggested for improved and more effective nitriding treatment of hot extrusion dies used in the industry.