The production of gear components includes numerous manufacturing operations, which are carried out to ensure proper surface characteristics. Shot peening is one of the surface finishing processes used for transmission components like gears to improve their fatigue behavior. Shot peening increases the compressive residual stresses on the surface, and the procedure also reduces the amount of retained austenite in the surface layer. In addition, shot peening has an influence on other mechanical properties, such as surface roughness and surface hardness. An experimental design was conducted with varying shot peening process parameters, like coverage density and intensity, to alter the surface layer of 13 transmission gear specimens. The correlation between shot peening parameters, Barkhausen noise (BN) features, and X-ray diffraction residual stress measurement was studied. Linear correlation was found between residual stress and shot peening parameters. The relationship between residual stress and BN root-mean-square was not evident but was revealed by taking the ratio of BN measurements at different frequencies. Additionally, BN features, such as peak position, coercivity, and integral area, were found to have a linear trend with the intensity. Along with the aforementioned measurements, other material characterization measurements were also taken. The shot peening coverage density was observed to have a linear relationship with surface roughness values, while an intensity of over 0.6 mm A was noticed to affect the surface hardness. The results obtained can be used in the determination of suitable shot peening parameters to achieve a surface with desired residual stress and other surface properties.