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This paper describes a newly developed steel composition and surface modification methods for improving the rolling contact fatigue strength of parts used in transmission systems, especially continuously variable transmissions (CVTs) to increase their torque capacity. The mechanisms of two types of typical rolling contact fatigue phenomenon in case hardening steel were examined with the aim of improving rolling contact fatigue strength. One concerned white etching constituents (WEC) and the other one concerned peculiar microstructural changes caused by hydrogen originating from decomposition of the lubrication oil as a result of repeated rolling contact stress cycles. The rolling contact fatigue strength limit due to WEC has been improved markedly by dispersing fine M23C6 alloy carbides in the martensite matrix at the subsurface layer of parts.