Pre-expanding fastener holes with an oversize mandrel has received considerable attention for use in aircraft structures, since this process has been shown to greatly improve the fatigue life of fastener holes. The deformation theory of plasticity is used here to determine the residual stress and displacement field caused by this process. Employing plane stress assumptions, general results are obtained for various interference levels and are presented in a graphical form useful to the designer. In addition, this analysis indicates that there is an optimum level of interference dependent primarily on the plate geometry. The optimum interference levels agree well with experience values established by fatigue testing in aircraft structural alloys.