Cold expansion of fastener holes creates compressive residual stresses around the hole. This well-known technique improves fatigue life by reducing tensile stress around the holes. However, cyclic loading causes these compressive residual stresses to relax, thus reducing their beneficial effect. Estimation of the fatigue life without considering the residual stress relaxation might lead to inaccurate results. In this research, numerical studies were carried out using 2D finite element (FE) models to determine the initial tangential and radial residual stress distributions generated by cold expansion and their relaxation under cyclic loading. To predict the stress relaxation, four nonlinear kinematic hardening models were applied in simulation of stress/strain path. The results obtained from the FE analysis were compared with available experimental results. A good agreement between the numerical and experimental results was observed.