Most studies and knowledge on stresses during heat treating were based upon furnace heating conditions. Induction heating provides very different evolution of temperature in the part and therefore different stresses.  This stress distribution may be positive for the part service or negative, reducing component strength or even causing cracks. The current presentation describes a method of coupled simulation of Electromagnetic, Thermal, Structural and Stress phenomena during induction hardening.  Commercial software packages Flux 2D/3D and Elta are used to calculate the thermal profile during induction heating process.  Program Dante is used to predict phase transformations and stress state during heating and quenching. Theoretical considerations on evolution of stresses are illustrated by simulation of induction hardening of external (case 1) and internal (case 2) surfaces of a tubular body. The process variables examined include thickness of the heated layer and severity of the spray quench.  Lower hardenability plain carbon steel AISI 1040, and higher hardenability steel AISI 4140 are used in this study.  The combination of process variables and steel properties affect the thickness of the hardened case and the resultant residual stress state.