JIS SCM440 steel is commonly used in precision parts after induction-hardening heat treatment. The fatigue behavior of induction-hardening parts largely depends on the combination of hardening depth and the magnitude and distribution of hardness and compressive residual stress. Therefore, it is necessary to determine the effects of different prior microstructures on the properties of JIS SCM440 steel after induction hardening. In the present study, the effects of prior microstructure (including spheroidized, annealed, normalized, and quenched and tempered) on the microhardness, hardening width, and residual stress of the induction-hardened specimens are investigated. The experimental results showed that the distribution behavior of residual stress in the hardened zone and heat-affected zone is due to the temperature gradient of the induction-hardening treatment. The hardened center appeared as compressive residual stress due to the martensitic transformation, which was accompanied by volume expansion. On the contrary, tensile residual stress will be generated in the heat-affected zone of incomplete phase transformation. The prior microstructure can affect the residual stress magnitude and distribution of microhardness and residual stresses due to the content of the cementite dissolved into the austenite at high temperatures. The difference in the carbon content of martensite after quenching will result in obvious differences in properties. The induction-hardened specimens with a normalized prior microstructure have the highest residual tensile stress in the heat-affected zone. The maximum residual tensile stress was 371 MPa in the heat-affected zone. The induction-hardened specimens with a quenched and tempered prior microstructure have the deepest hardening depth and widest residual compressive stress distribution range. The highest microhardness was 764 HV