Abstract: The 3-dimensional finite element models of tool and workpiece in the skew rolling process were built up with ANSYS/LS-DYNA software. Computer simulations on the ladder shaft in skew rolling under different parameters were conducted. The stress and strain of workpiece in skew rolling were obtained and the forming mechanism of interior defect in the billet was studied. An explanation to the mechanism of Mannesmann effect is that low cycle fatigue damage, in the condition of deformation with large plastic strain, occurs inside the workpiece due to the alternately-changing stress and strain.