The fatigue strength and the fracture mechanisms of ion-nitrided steel were investigated using three types of specimens—annealed specimens, nitrided specimens, and specimens from which the surface layer was removed (surface-removed specimens). The latter specimens' surface layers were removed after nitriding, reducing their radius by 0.1 mm. The fatigue limit of the nitrided specimens was higher than that of the annealed specimens, but was almost the same as that of the surface-removed specimens. This is related to the hardness distribution of the specimens. In the case of the nitrided specimen, the maximum hardness was recorded at the surface and decreased gradually toward the center of the specimen. The estimated strength deduced from the hardness of that specimen is higher than the measured fatigue limit within a depth of 0.1 mm from the surface. At internal depths of more than 0.1 mm from the surface, the estimated strength is expected to be lower than the fatigue limit. Accordingly, the fatigue limit and strength of the nitrided specimens are determined by the internal properties of the materials, and thus the fatigue limit and strength of the nitrided specimens are not decreased even if the surface layer is removed. In the case of the nitrided specimens, the cracks were difficult to observe from the surface because the crack initiations occurred internally. Since removing the surface layers facilitates observing the cracks on the surface, the initiation mechanism of internal cracking can be evaluated by observing surface crack initiation. In the case of the surface-removed specimens, many cracks initiated and propagated along the needle-shaped precipitates of Fe4N and finally these cracks coalesced with each other. From the observation of the fracture surfaces, a similar mechanism is assumed to be operating internally in the nitrided specimens.