A stress concentration case which is encountered in practice more than any other is the shoulder fillet. Shafts, axles, spindles, rotors etc., usually involve, in each case, a number of diameters connected by shoulders with fillet radii and very often it is necessary for a keyway to be near a shoulder. The objective in this study is to analyse the stresses in a shouldered shaft with a keyway subjected to an axial tensile load and to study the dependence of the keyway-end stresses on the distance between the shoulder fillet and the keyway end. This is done by performing a finite element analysis of the model. Two three-dimensional models with a grid of 3-D isoparametric solid elements are generated using the GE CALMA software. In Model 1 the keyway cuts into the shoulder fillet whereas in Model 2 the keyway end terminates just before the fillet. The stress determination is done by ANSYS, a powerful finite element analysis package. A comparative study of the two models shows that stress reductions occur at the keyway end when the keyway runs into the shoulder fillet. The results of this analysis also serve as a guide for the prediction of stresses for a stepped shaft with a keyway subjected to a bending moment