Abstract: The finite element method based on the parametric variational principle is proved to be a novel way for elasto-plastic analysis of rock and soil. Such method was used to simulate the squeezing effect during pile driving with an axisymmetric deformation under the frame of an ideal elasto-plastic constitutive model and the Drucker-Prager yield criterion. The displacement of the inner wall of cylindrical cavity as well as stress field and displacement field of the soil body were obtained with the numerical computation. These results were compared with the results of analytical solution and ANSYS. It is found that the finite element analysis with parametric variable for solving the problems under consideration is more efficient and suitable than the existing methods.