High strength low alloy (HSLA) steels are a new generation of plain carbon steels with significantly improved mechanical properties while maintaining good weldability with common commercial techniques. Residual stress and microstructural analysis of welded HSLA Strenx 700 MC was carried out in this research. Results have shown that the welding process causes significant grain coarsening in the heat affected zone. The microstructural changes are also accompanied with creation of tensile residual stress field in the weld metal and heat affected zone, reaching up-to depth of 4 mm. Tensile residual stresses are well known for acceleration of fatigue crack initiation and together with coarse grains can lead to significant decrease of the fatigue properties of the welded structure.