In order to further study the interaction between hammer and soil in the process of dynamic compaction, the paper used the finite element method to simulate the whole process.In the process of simulation, it adopted the finite element software ANSYS/LS - DYNA and thought the factors such as material nonlinear, large deformation and etc.Finally it got the variable curves of dynamic stress and displacement of soil with in the process of dynamic compaction and summarized the variable rule and distributing characteristics. The results of numerical simulation are basically consistent with the experimental data at the construction site.The rsult can provide reference for the design and construction of dynamic compaction.