The residual stress analysis and fatigue test of a steel plate with a hole were performed in order to investigate the effects of the cold expansion on the fatigue life of the plate. The cold expansion method is a metal forming process by expanding a hole in order to induce compressive tangential residual stresses near the hole. In this research, a S45C steel plate of 3.2 mm thickness with a hole of 4.318 mm diameter was cold expanded by using a mandrel, resulting in a degree of expansion 1.47%. A significant amount of compressive tangential residual stress of 502 MPa at the hole surface was calculated using the finite element analysis and the compressive residual stress was more widely spreaded in the entry and exit planes than the mid plane in the plate thickness. The compressive tangential residual stresses showed a very beneficial influence on the fatigue life of the plate by increasing 1.2 to 2 times longer lives compared to the plate without cold expansion, depending on the applied load levels. Fatigue crack initiated and propagated at the hole surface of the mandrel entrance region, where relatively lower magnitude of compressive residual stress was found than the other region.