This study investigated the effects of KN and process time on the formation of a compound layer at a nitriding temperature of 540℃ for SCR420H material. As a result of controlled nitriding from 3 h to 20 h at KN 1.2 atm-1/2, compound layers were formed up to about 10 ㎛, and an effective hardening depth of about 460 ㎛ was obtained. Initially, an ε+γ' complex phase was formed, and the phase fraction changed over time, and finally, the fraction of ε phase decreased to less than 1%. With higher KN, the compound thickness increased, a pore layer was formed on the surface, and the surface hardness decreased. By applying the controlled nitriding process, it was possible to produce annulus gears with a compound thickness of 12.8 ㎛ and an ε phase of 5% or less. The annulus gears made through controlled nitriding were mounted on a 6-speed transmission and tested for durability. As a result, the durability test of 250,000 km was satisfied, and the transmission efficiency was also confirmed to be expected.