Titanium matrix composites hold immense application potential in the field of aerospace high-temperature load-bearing components. Laser additive manufacturing technology, known for its short production cycles and high efficiency, enables rapid fabrication of these composites and their components. However, the introduction of ceramic reinforcement phases leads to issues such as high surface roughness and the concentration of residual tensile stress in Ti matrix composites, which hinders their engineering applications. This study investigated the effect of shot peening on the microstructure and mechanical properties of a laser deposited 1.0%TiBw (volume fraction)/Ti65 composite. The results reveal that after shot peening treatment, the surface roughness of the 1.0%TiBw/Ti65 composite increases from 2.02 μm (in the as-laser-deposited state) to 5.21 μm at an air pressure of 0.25 MPa. Meanwhile, the surface microhardness increases from 381.1 HV (in the as-laser-deposited state) to 683.9 HV under the same air pressure. The maximum residual compressive stress is located at a depth of 30–90 μm from the surface, reaching −571 MPa at a shot peening air pressure of 0.2 MPa. Shot peening treatment causes the α-colonies of the 1.0%TiBw/Ti65 composite to be fragmented into lamellar α or equiaxed α grains. When the air pressure is 0.2 MPa, the room-temperature tensile strength of the 1.0%TiBw/Ti65 composite reaches achieves 1238 MPa. According to the calculation based on the strengthening theory, the increase in the room-temperature yield strength of the 1.0%TiBw/Ti65 composite is mainly attributed to the dislocations introduced during the shot peening process.