In order to improve wear and fatigue resistance of titanium alloy, plasma alloying technique was applied to treat TC4 alloy with zirconium followed by nitrogen, and the gradient metallurgical zirconium nitride (ZrN) layer was fabricated. The surface metallurgical layer was then treated by shot peening. The microstructure, chemical composition and microhardness profile of the modified surface layer were then evaluated by using scanning electron microscope, X-ray diffraction, glow-discharge photo-electron spectroscopy and micro- hardness tester. The fatigue behavior and mechanism influencing by the modified surface layer were investigated. The results demonstrate that the uppermost modified layer is composed of ZrN-TiN compound phase (mainly ZrN) and underlying nitrogen-rich Zr-Ti solid solution, and the surface hardness is raised 320%. The modified surface layer dramatically reduces the fatigue resistance of base material, due to the low toughness of ZrN-TiN layer and the increase of surface roughness. After combined with shot peening, the fatigue resistance of TC4 alloy is improved significantly, more than the specimens of both base material and shot peening alone. Since shot peening introduces a deep and high value compressive residual stress into the surface, lowers the roughness and refines the surface microstructure of TC4 titanium, and thus the initiation and early growth of fatigue cracks are restrained.