Autofrettage process is used for internal forming and sizing of cylinder designed to withstand high internal pressures. Once the tube is autofrettaged, it needs to be machined to its final dimensions both at the bore and its outer surface. This paper presents an analytical analysis and numerical analysis of machined compound cylinder using finite element code, ANSYS10.0. An analytical model for predicting the level of autofrettage following either inner, outer, or combined machining of the compound cylinder is developed for the autofrettage residual stress field is simulated by an autofrettaged pressure. The autofrettaged pressures are obtained by using trying-error method. As autofrettage percentage is 20 % and 40 %, the numerical results are found to be in almost agreement with the analytical ones. However, as autofrettage percentage is 60 %, the numerical results have a little difference with the analytical ones.