This paper presents a novel hybrid in-situ additive manufacturing (AM) method —Laser Shock Forging (LSF), which combines laser shock peening (LSP) with laser melting deposition (LMD). Based on the classical Bar-frame model and inherent strain theory, the mechanisms of the effects of pretreatment and post-treatment on AM process has been firstly elaborated. Towards controlling tensile residual stress (TRS) in the as-built (AB) state of AM parts which has a detrimental effect on their fatigue life, we then developed LSF to introduce tensile inherent strains in LMD built parts in an in-situ manner, which will convert TRS to compressive residual stress (CRS). The laser beam used for shock peening can be adjusted to move synchronously with the laser beam used for metal deposition at a certain distance, ensuring the laser shock peening to act on the region where the material temperature cools down to the forging temperature range. Then experimental works have been conducted on 316L stainless steel, residual stress distributions of the AB, LSP and LSF treated specimens were compared, results show that LSF increases both the magnitude and depth of CRS compared with conventional LSP treatment, thus providing a promising application in enhancing fatigue life in AM process.