The magnetic flux leakage (MFL) method is currently the most commonly used pipeline inspection technique. In this paper, numerical simulation and experimental investigation on defect inspection in pipeline steel using MFL were carried out. In theoretical analysis, typical three-dimensional (3D) defects were accurately modeled and detailed MFL signals in the test surface were calculated by 3D finite element method (FEM). To confirm the 3D FEM results, different artificial defects were made and the MFL experiments were performed. The experimental study demonstrated that the results were agreement with the 3D FEM result. The results show that the 3D FEM is an effective analysis method for pipeline steel MFL inspection.