Typical macroscopic and microscopic morphologies of inner fold and bulge defects of J55 oil casing pipe are observed, and inclusions and the metallographic structure near these defects are detected to obtain an understanding of the defect formation mechanisms. The results show that the main inclusions near the origin of bulge defects are CaO·Al2O3 and MgO·Al2O3, with a similar inclusion composition being found in the inner fold layer. Brittle nonmetallic inclusions are the main causes of bulge and inner fold defects. Microcracks are formed owing to relative sliding between the inclusions and the metal matrix during the rolling process, and further extension of these microcracks then leads to the creation of bulge defects under sizing stress. Inner fold defects are formed from bulge defects owing to recompression and breaking of the latter as the plug exits from the pipe. It can therefore be concluded that the fundamental measures to avoid bulge and inner fold defects in oil casing pipe should be optimization of the deoxidization process and improvements in steel cleanliness.