The stepped specimen which is subjected to step loading is modeled to study the initiation and growth of adiabatic shear band using explicit time integration finite element method. Three different clearance sizes are tested. The material model for the stepped specimen includes effects of strain hardening, strain rate hardening and thermal softening. It is found that the material inside the fully grown adiabatic shear band experiences three phase of deformation, (1) homogeneous deformation phase, (2) initiation/incubation phase, and (3) fast growth phase. The second phase of deformation is initiated after sudden shear stress drop which occurs at the same time regardless of the clearance size. The incubation time prior to fast growth phase increases, as the clearance size of the stepped specimen increases. Whereas, after incubation period, the growth rate of the adiabatic shear band decreases, as the clearance size decreases. It is also found that two adiabatic shear band may develop instead of one for the smaller clearance size.