To study the behavior of the axial compression circular steel tube reinforced by a sleeved tube, the finite element model of casing tube reinforcement was established based on the existing research results. The mechanical properties and failure mechanism of the reinforced casing tube specimen were systematically studied by finite element parameter analysis. The results show that in the elastic stage, the outer-sleeved tube is less involved in the force. After entering the elastic-plastic stage, the outer-sleeved tube starts to work and is stressed together with the inner steel tube. Slenderness ratio, diameter-thickness ratio, and ferrule spacing are the main factors affecting the ultimate axial compression capacity of casing reinforcement components. When other variables are consistent, the ultimate axial compression capacity of specimens after reinforcement with different initial stress ratios is basically the same. The increase of the ferrule width and thickness has little effect on the improvement of the ultimate axial compression capacity of the reinforcement components. The load value after casing reinforcement calculated by the current standard is much higher than the test load value of the component. According to the results of parameter analysis and the current standard, the design method for the ultimate axial compression capacity of the circular steel tube reinforced by a sleeved tube was put forward.