To enhance erosion resistance of 16Cr-5Ni steel surface for use in hydroturbine applications, surface hardening study was carried out using a high-power fiber coupled diode laser. For laser surface alloying (LSA), Wallex-50 powder was coated onto 16Cr-5Ni steel surface (two-stage process) before subjecting the surface to laser treatment and then laser treated to enhance the surface roughness. Characterization of laser-treated and untreated surfaces was analyzed by X-ray diffraction, optical microscopy, scanning electron microscopy and Vickers microhardness tests. Microhardness profile across the cross-section of a laser-modified hardened sample showed higher microhardness compared to the as-received 16Cr-5Ni steel specimen. Erosion resistance of the modified surface of the steel specimens was estimated through slurry erosion test for 1 h at two slurry velocities, 10 and 12 m/s, and three impingement angles, 30°, 60° and 90°. According to SEM images, the wear rate of laser-modified 16Cr-5Ni steel was found to be much lesser compared to the as-received steel specimen.