The progressive damage analysis was used to explore the mechanical behavior of the fiber overwrapped aluminum liner cylinder. The plan of stiffness degradation was designed by the Hashin failure criteria, and the VUMAT subroutine was programmed. The generation and evolution of the damage for the composite laminates are simulated. According to the classical grid theory and the actual situation, the finite element model of the cylinder is established. The development and accumulation of progressive damage for composite layer is analyzed. The necessity of autofrettage technology to improve the bearing capacity of cylinder is verified, and the range of reasonable force of autofrettage is put forward. Results show that the order or possibility of damage is matrix tension damage > tensile delamination damage > fiber tension damage/matrix compression damage. Most of the damage starts from the spiral winding layer. In addition to the matrix tension damage from the head to the cylinder and the outside composite layer to the inside, most damages develop from the inner layer to the outer layer. The stress distribution and the carrying capacity of the cylinder structure are improved, when the force of autofrettage is 1.5~1.65 times of the maximum working pressure. The optimum force of autofrettage should be 1.5 times of the maximum working pressure from the standpoint of reducing the damage of composite material and minimizing the stress of lining.