Cold expansion of fastener holes is a mechanical process widely used in the aerospace industry. This treatment leads to an improvement of fatigue behavior due to the developed compressive residual stresses on the hole surface. The residual stress profile depends on the parameters of cold expansion, which are expanding rate, inserting direction of mandrel, material properties dtc. Despite its importance to aerospace industiries, little attention has been devoted to the accurate modeling of the process. In this paper, three-dimensional finite element simulations have been conducted for the cold expansion in an aluminium plate in order to predict the magnitude and distribution of the residual stress. To prove the results of FE analysis, the residual strain was measured by strain gage in cold expansion test. Maximum compressive residual stress could be increase about 7 percentage using the 2-step cold expansion method.