The three dimensional finite element model of the pavement has been built on the basis of elastic-plastic finite element method and the assumption of the layered system of asphalt pavement. The layered flexible pavement is composed of asphalt surface, granular base and cohesive soil subgrade and is acted by dynamic movement load. The simulation results show that vertical displacement of asphalt surface has the maximum value and reduces gradually with the improvement of the road depth. Vertical stress, longitudinal stress and transverse stress result in the fatigue damage of asphalt pavement together. The key factor is the alternating variation of longitudinal stress. The maximum longitudinal stress and the maximum transverse stress exist in the junction of the asphalt layer and the granular base. Furthermore, the maximum longitudinal strain and the maximum transverse strain are induced in the junction of the granular base and the soil subgrade.