Local modulation of the Shockley-type surface state was studied around threading dislocations at the surfaces of ultrathin Ag(111) epitaxial films on Si(111) substrates. Scanning tunneling microscope (STM) observations indicated that the wavelength of the surface state electron was shortened around the dislocations in the electron standing wave pattern. Scanning tunneling spectroscopy (STS) revealed that the bottom of the local surface state (E0) shifts downward around the dislocation. The shift in E0 and the lattice displacement uz have a linear relation, which indicates that the shift of the surface state is caused by local relaxation of the misfit strain around the dislocation.