In order to investigate the process of incremental sheet forming (ISF) through both experimental and numerical approaches, a three-dimensional elasto-plastic finite element model (FEM) was developed to simulate the process and the simulated results were compared with those of experiment. The results of numerical simulations, such as the strain history and distribution, the stress state and distribution, sheet thickness distribution, etc, were discussed in details, and the influences of process parameters on these results were also analyzed. The simulated results of the radial strain and the thickness distribution are in good agreement with experimental results. The simulations reveal that the deformation is localized around the tool and constantly remains close to a plane strain state. With decreasing depth step, increasing tool diameter and wall inclination angle, the axial stress reduces, leading to less thinning and more homogeneous plastic strain and thickness distribution. During ISF, the plastic strain increases stepwise under the action of the tool. Each increase in plastic strain is accompanied by hydrostatic pressure, which explains why obtainable deformation using ISF exceeds the forming limits of conventional sheet forming.