The fatigue cracking behavior of ultra-high strength steels containing rectangular inclusions of small sizes were investigated based on in situ observations by scanning electron microscopy (SEM). The size and shape of rectangular inclusions affect markedly the initiation site and propagation path of a fatigue crack. Especially, the initiation site of a fatigue crack depends strongly on the angle between the long-axis of a rectangle inclusion and the loading direction, and the length/width ratio of this rectangle inclusion because the residual stress distribution fields vary with these conditions. The results coincide very well with those of finite element analysis.