The U.S. Air Force has initiated a technology development initiative known as Engine Rotor Life Extension (ERLE), which has the goal of extending the useful lifetime of major, fracture-critical components in currently fielded gas turbine engines, without increasing the risk of component failure. Full achievement of this goal will require improvements in a broad range of technologies, including life prediction and fracture mechanics, nondestructive evaluation, engine usage and health monitoring, and component repair. This paper focuses on a key aspect of the life prediction process - the incorporation of residual stress effects. The benefits of compressive residual stresses in improving fatigue life, retardation of crack growth and resistance to foreign object damage have been demonstrated. Hence, the%se beneficial surface treatments are extensively employed in the turbine engine components. However, current damage-tolerance-based life management practices do not explicitly account for the residual stresses induced by surface enhancement procedures. Significant increase in predicted damage tolerance can be obtained if residual stresses are included in the life prediction methodology. This paper provides an assessment of the role of residual stresses in the durability of the component and identifies critical issues to be addressed during implementation in life prediction methods.