The rolling compaction can produce porous or dense strips with special functions. The mechanical behaviors in rolling compaction are hard to predict accurately and efficiently by traditional means. The numerical simulation based on the Finite Element Method (FEM) provides a flexible and efficient way for such problems. This paper introduces three-dimensional (3-D) FEM simulations for the rolling compaction of the iron matrix powders. The elliptical yield criterion, elasto-plastic constitutive relationship and the friction model were analyzed. Simulations were based on the second-developed user subroutine in MSC.Marc. Effects of friction and rolling velocity on the rolling force, distribution of the density and some other parameters were analyzed.