Cyclic axial loads in tubular steel sections might lead to local buckling, wrinkling and accumulation of plastic strains in the tube. For example, this can be caused by repetitive start-up/shutdown and temperature changes in an offshore pipeline which generates cycles of axial compression/relaxing in the line. During their life time steel tubes may also experience material loss due to corrosion or wall thinning. The current paper reports the result of a numerical modeling of ratcheting behavior of steel tubes with a rectangular defect under cyclic axial loadings. The tubes have been initially subjected to monotonic axial compression beyond initiation of small amplitude wrinkles and subsequently to persistent axial cyclic loads. A nonlinear isotropic/kinematic (combined) hardening model has been adopted for the material, which its parameters have been obtained from cyclic tests conducted on small coupon specimens. The results of the numerical simulation have been compared with experimental data. In general, a reasonable agreement has been noticed between the experimental and the numerical results for the ratcheting behavior of the tubes. It is shown that surface imperfections have a very pronounced effect on the ratcheting response of the defected tubes, as compared to the monotonic responses. The model has also been used to study effects of some key factors such as the initial strain level, the stress amplitude, the mean stress, the loading regime, wall thinning and the material hardening properties on the ratcheting response and on the progressive plastic buckling of steel tubes with a rectangular defect.