Laser cladding is to use a focused laser beam to melt injected or pre-placed powder (or wire) to deposit a layer of desired material onto the surface of an existing part to form dense and metallurgically bond coating with improved wear, corrosion, and/or oxidation resistance. However, significant amount of residual stresses could be introduced into the deposited layer, which may adversely affect the mechanical properties and dimensional stability of the clad part. In this paper, a blown powder laser cladding technique was used to deposit Ni-base IN-625 alloy on IN-625 substrate and AISI P20 tool steel on P20 substrate. The evolution of the microstructure and chemical composition in the clad layer was studied by SEM/EDS. The residual stress profiles across the depth of the clad were measured through a combination of XRD, Hole-Drilling and Neutron Diffraction. Their implication on the mechanical properties of the clad parts will also be discussed.