Stress distributions and plastic deformation zones are factors directly influencing the fatigue life of components under cyclic contact. An effective approach to improving the resistance of a steel to contact fatigue failure is surface hardening, which builds gradient yield strength from the surface of the steel to the bulk. When using the distortion energy theory as the criterion to identify failure initiation for a case-hardened steel, contact yield starts in the subsurface wherever the von Mises stress reaches the local material strength, rather than at the point of the maximum von Mises stress in the subsurface. If the yield strength changes from the surface to the bulk following a straight line, the location of yield initiation should occur at the tangency of the strength line and the von Mises stress curve. Analyses on circular, rectangular, and elliptical contacts are presented to reveal the locations of contact yield initiation for such case-hardened steels subjected to rolling contact stresses, for which the influence of friction can be ignored. A group of formulas relating contact yield initiation, in terms of the critical pressure, location of the first yield, and plasticity index (transition to plasticity) to case-hardening parameters, such as the case slope, the minimum case depth, and surface and bulk strengths, are derived to facilitate contact element designs using case-hardened materials. The results are applied to examine the rolling contact behaviors of several case-hardened steels, and the data correlation suggests that their rolling contact fatigue lives are related to a nondimensional case-hardening slope besides external loading.