Densification behavior of iron powder under cold stepped compaction was studied. Experimental data were also obtained for iron powder under cold stepped compaction. The elastoplastic constitutive equation based on the yield function of Shima and Oyane was implemented into a finite element program (ABAQUS) to simulate compaction responses of iron powder during cold stepped compaction. Finite element results were compared with experimental data for densification, deformed geometry and density distribution. The agreement between finite element results and experimental data was very good for iron powder. The distributions of hydrostatic pressure and the Mises stress of iron powder under cold stepped compaction were also studied.