Surface modification of martensitic stainless steel UNS S42000 was achieved by laser surface-melting using a 3.5-kW continuous wave CO laser. The cavitation erosion and corrosion characteristics of laser surface-melted specimens in 3.5% NaCl solution at 23°C were studied by means of a 20-kHz ultrasonic vibrator at a peak-to-peak amplitude of 30 μm and a potentiostat, respectively. In a series of 4-h cavitation tests, the cavitation erosion resistance of laser-melted specimens fabricated under a power of 1.7 kW and a scanning speed of 25 mm/s was 70 times that of the as-received (annealed) S42000 and 1.8 times that of conventionally heat-treated specimens. The excellent cavitation erosion resistance was due to the combined effect of a high volume fraction of retained austenite (89%) and a moderate hardness (450 Hv). By using different processing parameters, it was found that the cavitation erosion resistance of the laser-melted specimens increased with the increase in volume fraction of retained austenite, a result attributable to the high martensitic transformability of the austenite in S42000. On the other hand, cavitation erosion resistance increased with the increase in hardness to a maximum value and then dropped with further increases in hardness. This indicated that martensitic transformability played a more important role than hardness in cavitation erosion. The pitting potentials of all laser-melted specimens shifted in the noble direction, and the pits formed in the laser-melted specimens were shallower as compared with those formed in as-received and hardened S42000 specimens. The improvement in pitting corrosion resistance resulted from the dissolution or refinement of carbide particles and the presence of retained austenite, as evidenced by the fact that the pitting potential increased linearly with the amount of retained austenite. The present study thus shows, that with proper processing parameters, both the cavitation erosion and pitting resistance might be simultaneously improved by laser-surface melting, at least for martensitic stainless steels.