Abstract: Hydrogen induced internal fatigue crack initiation and propagation in steel was studied by numerical simulation. First, finite element analysis (FEM) was used to analyze the process of hydrogen diffusion and accumulation at a defect in steel under fatigue load, and then the concentration of hydrogen was computed. According to the inclusion theory, the area where hydrogen accumulated was regarded as an elastic inclusion in the vicinity of the defect, and the concentration result of FEM analysis was used to calculate the stress intensity factor induced by the elastic inclusion. Thus a criterion of crack initiation and propagation was established. Hydrogen-induced fatigue crack initiation and propagation rules were studied under different load conditions. The FEM formula of transient diffusion deduced by Sofronis and McMeeking was adjusted with the trapezoidal rule. The trapezoidal rule reduces oscillations due to steep concentration and stress gradients after initial loading, this is very important to calculate the criterion of crack initiation and propagation. At the last, some methods of improving the simulation precision and refining model were discussed.