The cold expansion method was proposed to improve the high cycle fatigue (HCF) property of 7A85 aluminum alloy straight lugs. The microstructure, the microhardness and the residual stress near the hole wall of cold expanded lugs were investigated. The results indicate that a plastic deformation layer with about 150 μm in thickness is formed on the surface of the hole wall. Within the plastic deformation layer, the microhardness and the compressive residual stress are high, and the grains are stretched along the moving direction of the mandrel and compressed perpendicular to it. The fatigue life and fatigue strength were found to be improved significantly by cold expansion (CE). The fatigue crack initiation and propagation of cold expansion specimens were analyzed compared with those of the specimens without cold expansion (WCE). The mechanism of the improved fatigue property for cold expanded 7A85 aluminum alloy straight lugs was discussed