The plasma-facing components of future fusion reactors, where the Eurofer97 is the primary structural material, will be assembled by laser-welding techniques. The heterogeneous residual stress induced by welding can interact with the microstructure, resulting in a degradation of mechanical properties and a reduction in joint lifetime. Here, a Xe+ plasma focused ion beam with digital image correlation (PFIB-DIC) and nanoindentation is used to reveal the mechanistic connection between residual stress, microstructure, and microhardness. This study is the first to use the PFIB-DIC to evaluate the time-resolved multiscale residual stress at a length scale of tens of micrometers for laser-welded Eurofer97. A nonequilibrium microscale residual stress is observed, which contributes to the macroscale residual stress. The microhardness is similar for the fusion zone and heat-affected zone (HAZ), although the HAZ exhibits around ~30% tensile residual stress softening. The results provide insight into maintaining structural integrity for this critical engineering challenge.