High frequency induction heating is a method of surface treatment which restricts the hardening area using the skin effect. Since the penetration depth of the magnetic field in the workpiece is dependent on the frequency, the required size of hardening area can be obtained by selecting an appropriate frequency. High frequency induction heating is able to harden a large area at once, in which the shapes of the coil and workpiece and the distance between them are important factors for the hardening area shape and the distribution of residual stresses. In this study, the transient heat flow and thermal stress were analysed for the high frequency induction surface hardening of a blade mould by using the modified two-dimensional finite element method. Besides the volume change in the phase transformation, the effect of transformation plasticity was also considered as an additional strain in the numerical analysis of the high frequency induction hardening process. The hardening area was fairly uniform in the mould surface except around the corner where the distance between the coil and workpiece was slightly larger than on the other parts. The thermal stress was induced mainly by the temperature gradient and martensitic phase transformation, while the latter was found to have a greater influence on the residual stress than the former. Simulation results revealed that compressive residual stresses occur in the hardening area, while the maximum tensile residual stress occurs near the boundary of the hardened zone.