To investigate the formability of a T-shaped tube hydroforming by a three-stage punch shape, numerical simulations and experiments were utilized to analyze the three-stage punch shape effect on the branch height, the thickness distribution, the deformation behavior and the microstructure compared to the traditional punch. The results demonstrated that the branch height could be increased and the maximum thinning could be decreased by the three-stage punch shape without bursting, compared to the traditional punch. The stress and strain distributions for the T-shaped tube were changed due to the three-stage punch shape utilization, whereas an increased amount of material at the main tube zone was pushed into the branch zone. Also, the original grains could be refined significantly and homogeneously, in order for the hardness to be improved by 15% at region 3 by the three-stage punch shape. Consequently, the formability for the T-shaped tube hydroforming by the three-stage punch shape could be improved compared to the traditional punch.