Failure of aluminium foams due to dynamic indentation and penetration is very common in their application such as light-weight structural sandwich panels, packing materials and energy absorbing devices. This requires a sound understanding of deformation and energy absorption mechanisms of the aluminium foams as well as the effect of impact velocity. In this study, a finite element analysis using ABAQUS is conducted for the dynamic indentation/penetration process of aluminium foams under a rigid flat-headed indenter. The indenter is pushed into the foam either at a constant velocity or with an initial velocity. Two mechanisms exist: compression of the foam ahead of the indenter and fracture along the indenter edge. Effect of impact velocity is noted on the size of a localized deformation and the total energy absorbed.