The formation of surface austenite leads to microstructural changes, causing grinding hardening. However, the effect of grinding mechanical stresses on surface austenitization remains unclear. Additionally, the mechanical properties of the metamorphic layer are crucial for studying grinding hardening. Therefore, in this study, the evolution of the microstructure and corresponding mechanical properties of the grinding surface in 8Cr4Mo4V steel was analyzed. The microstructure of the metamorphic layer was characterized using scanning electron microscopy (SEM) and transmission electron microscopy (TEM). Physical simulation was employed to analyze the effect of mechanical compressive stress on the austenite transformation start temperature (Ac1). Dimensionless analysis, based on nanoindentation results, was conducted to study the mechanical properties of the metamorphic layer. The metamorphic layer in 8Cr4Mo4V steel consists of martensite, retained austenite, and undissolved carbides. The unresolved carbides are distributed within the cryptocrystalline martensite. Increasing the grinding depth and workpiece feed speed results in higher mechanical stress and temperature, which leads to a reduction in Ac1 and a higher content of austenite. The yield strength of the metamorphic layer is 2427 MPa, which is 427 MPa higher than that of the matrix, indicating obvious grinding hardening.