This work demonstrates a new processing technology termed magnetic energy intensive multifunction cavitation (MEI-MFC). In this technique, a strong magnetic field is used to concentrate the bubble energy while ultrasonic waves are applied from the perimeter of a water-jet cavitation jet. The cavitation bubbles are expanded while generating a swirling flow that increases the temperature and pressure of the bubbles. In addition, the presence of a strong magnetic field at the nozzle outlet and the collisions of charged bubbles induced by the Lorentz force cause a significant increase in the number of bubbles and the energy density. This enhanced cavitation processing technology can be applied to various materials to improve strength and to induce functionalization. The peening of austenitic stainless steel using this technique provides a highly corrosion-resistant surface while suppressing the formation of martensite and preventing sensitization by generating a new surface microstructure with a toughened layer directly underneath.