Cold rotary forging is an innovative incremental metal forming process, which is obviously different from the conventional forging process in many aspects, such as the metal flow, degree of inhomogeneous deformation of workpiece and force and power parameters. In the current work, a 3D elastic-plastic dynamic explicit FE model of cold rotary forging of a cylindrical workpiece is developed under the ABAQUS software environment and its validity has been verified by the experiment. Based on the reliable 3D FE model, the cold rotary forging and conventional forging process are simulated and their difference in the forming process has been thoroughly clarified. The research results may help to understand the cold rotary forging process better. Furthermore, they provide valuable guidelines for further theoretical analysis and experimental studies on the cold rotary forging process.