A methodology of formulating an incremental elasto-plastic three-dimensional finite element model, which is based on Prandtl-Reuss flow rule and von Mises’s yield criterion respectively, associated with an updated Lagrangian formulation, is developed to simulate elliptical cup drawing process. An extended algorithm is proposed to formulate the boundary conditions, such as the yield of element, maximum allowable strain increment, maximum allowable rotation increment, maximum allowable equivalent stress increment, and tolerance for nodes getting out of contact with tool. In order to verify the reliability and accuracy of the FEM code, the fractured thickness of a specimen in the simple tension test is adopted as the fracture criterion of forming limit in simulation. A set of tools was designed to perform the elliptical cup drawing experiment on the hydraulic forming machine. According to the simulation and experimental results, the limit drawing ratio (LDR) amounts to about 2.136 for penetration in the elliptical cup drawing process of this study. This paper also found a comparison of the LDR of different tool radii. According to the definition of LDR, when the die radius is increased from R3.0mm to R9.0mm, the LDR would increase from 2.11 to 2.157. When the punch radius is increased from r3.0mm to r9.0mm, the LDR would increase from 2.07 to 2.181. This paper has provided a better understanding of the elliptical cup drawing process for improving the manufacturing processes and the design of tools.