Shot peening was used for improving the fatigue properties of Fe-2Cu-0.5C PM steel. The steel is generally used for production of high performance sintered parts such as small connecting rods for cooling system compressors. To distinguish the effects of each alloying element, Fe, Fe-2Cu, and Fe-0.5C were also investigated. Optimum shot peening intensities are: 25A for pure iron and Fe-2Cu, 30A for Fe-0.5C, and 35A for Fe-2Cu-0.5C. For these intensities, improvements of the fatigue strengths of the materials investigated are as follows: 31% for pure iron, 48% for Fe-0.5C, 46% for Fe-2Cu, and 38% for Fe-2Cu-0.5C. From the experimental results it could be concluded that both of the alloying additions, carbon and copper, are contributing to the fatigue strength improvements by shot peening.