In a multi-pass weld, the development of residual stress to a large extent depends on the response of the weld metal, heat affected zone and parent material to complex thermo-mechanical cycles during welding. Previous investigations on this subject mostly focused on mechanical tensioning or heat treatment to modify the residual stress distribution in and around the weld. In this research, microstructural refinement with modification of residual stress state was attempted by applying post weld cold rolling followed by laser processing. The hardening of the weld metal was evaluated after welding, post weld cold rolling and post weld cold rolling followed by laser processing. The residual stress was determined non-destructively by using neutron diffraction. Hardness results showed evidence of plastic deformation up to 4 mm below the weld surface. In residual stress analysis, the result indicated that, up to 4 mm below the weld surface, post weld cold rolling was effective in changing the longitudinal residual stress distribution, modifying the stress state from tensile to compressive across the weld center line. Post weld cold rolling followed by laser processing was carried out to induce recrystallization of the cold rolled grains. Microstructural characterization indicates some grain refinement near the capping pass, however, laser processing reinstated the as-welded residual stress distribution and profile. The stress variation in as-welded state, showed diminishing longitudinal peak stress magnitude through the thickness from cap to root pass.