The reliability of welded structure can be evaluated through welding residual stress analysis and fatigue strength assessment. In this study, welding residual stresses of multi-pass dissimilar material welded joint between alloy 617 and 12Cr steel were analyzed numerically and experimentally. Fatigue strength was then assessed in the air. Based on results of welding residual stress analysis and fatigue strength assessment, a fatigue design method considering welding residual stress was investigated. Welding residual stresses at the weld of dissimilar welded joints distributed complicatedly on longitudinal and transverse directions, showing differences but a very similar distribution tendency between numerical and experimental results. Numerical and experimental peak values of welding residual stresses at HAZ of the weld on the 12Cr steel side were predicted to be 333 MPa and 282 MPa HAZ, respectively. The fatigue limit of dissimilar material welded joint between alloy 617 and 12Cr steel was assessed to be 306.8 MPa, which was 40% of tensile strength (767 MPa) of dissimilar material welded joint. However, the stress range including welding residual stress was assessed to be 206.9 MPa, which was 14% lower than that calculated by including the effect of residual stresses.