An efficient flexible iterative algorithm with a general approach is presented for calculations of surface form errors in peripheral milling of thin-walled workpiece. An efficient finite-element model for tool/workpiece is presented to analyze the surface dimensional errors in peripheral milling of aerospace thin-walled workpieces. The efficient flexible iterative algorithm is proposed to calculate the deflections and the maximum surface form errors as contrasted with the rigid iterative algorithm used in the literatures. Meanwhile, some key techniques such as the finite-element modeling of the tool-workpiece system; the determinant algorithm to judge instantaneous immersion boundaries between a cutter element and the workpiece; iterative scheme for the calculations of tool-workpiece deflections considering the former convergence cutting position are developed and the method for calculating the position and magnitude of the maximum surface form errors are developed and presented in detail. The proposed approach is validated and proved to be efficient through comparing the obtained numerical results with the test results.