Oxygen cutting is the principal method for temporary hatch opening in hull structure. Residual stresses induced by oxygen cutting have a large influence on subsequent sealing and structure safety. Based on oxygen cutting theory, a heat source model was proposed with the combination of preheating flame and reaction heat between iron and oxygen, and a model was presented to simulate the cutting process on the basis of thermal elastoplastic FEM analysis, including the temperature and stress distribution. An oxygen cutting experiment was performed, in which an infrared radiation was used for surface temperature measurement. The residual stresses were measured by impact-indentation measurement. As a result, the calculation results were consistent with experiment values. The research concluded that there is a region in which the tensile stresses values exceed the yield point of material along the kerf, and the width of this region will be influenced by cutting velocity, opening dimension and longitudinal constraints.