Microsegregation of alloying elements is prone to hot cracking in the weldment of alloy C-276. The formation of topologically close packed phases P and µ is largely responsible for the hot cracking. The present study articulates the effect of laser shock peening (LSP) to improve the metallurgical and mechanical properties of the weld joint. The weld joint was fabricated by pulsed current gas tungsten arc welding (PCGTAW) using an ERNiCrMo-3 filler wire. LSP without coating was carried out on the cap surface of the weldment. Microstructural studies were carried out to compare the as-welded and laser-peened microstructure on the fusion zone. The results show that a fine equiaxed dendritic structure was observed in both conditions. EDS analysis was carried out to evaluate the microsegregation of alloying elements. EDS analysis indicates that there are no secondary intermetallic phases. X-ray diffraction analysis was carried out to evaluate the phase change and crystallite size in the as-welded and laser shock peened fusion zone. The result shows 48.99% reduction in crystallite size after LSP. Hardness and tensile strength results indicate there is a consequential increase in laser shock peened specimen compared with as-welded specimen. © 2018, Indian Academy of Sciences.