In precipitation-strengthened steel, precipitation particles are considered to be cut by the prestrain treatment and affect the fatigue property of the steel. In this study, fatigue tests on prestrained specimens were performed to investigate the effect of the prestrain and precipitate cutting on the crack initiation and propagation characteristics of precipitation-hardened stainless steel (SUH660). Plain specimens were used to observe the process of crack initiation and propagation. The fatigue life was divided into the crack initiation life and the crack propagation life. The results of the fatigue test showed that the crack initiation life of a prestrained specimen was longer than that of a nonstrained specimen. The observed crack propagation mode was mainly Mode II. The measured crack propagation life of the prestrained specimen was shorter than that of the non-strained specimen, which was the opposite of the results observed for carbon steel. It was assumed that this was because Mode II crack propagated more easily and faster in the prestrained specimen, where the precipitates were cut, than in the non-strained specimen. Therefore, the relationship between the fatigue life of the prestrained specimen and the non-strained specimen is considered to be dependent on the stress level. When the crack propagation life governed the fatigue life, the fatigue life of the prestrained specimen was shorter than that of the non-strained specimen. However, when the crack initiation life governed the fatigue life, the fatigue life of the prestrained specimen would be longer than that of the non-strained specimen.