Recent studies indicate that 3 morphological types of atlanto-occipital joint (AOJ) exist in the craniovertebral junction and are associated with type II basilar invagination (BI) and atlanto-occipital instability. However, the actual biomechanical effects remain unclear. This study aims to investigate biomechanical differences among AOJ types I, II, and III, and provide further evidence of atlanto-occipital instability in type II BI. Models of bilateral AOJ containing various AOJ types were created, including I-I, I-II, II-II, II-III, and III-III models, with increasing AOJ dysplasia across models. Then, 1.5 Nm torque simulated cervical motions. The range of motion (ROM), ligament and joint stress, and basion-dental interval (BDI) were analyzed. The C0-1 ROM and accompanying rotational ROM increased progressively from model I-I to model III-III, with the ROM of model III-III showing increases between 27.3% and 123.8% indicating ultra-mobility and instability. In contrast, the C1-2 ROM changes were minimal. Meanwhile, the stress distribution pattern was disrupted; in particular, the C1 superior facet stress was concentrated centrally and decreased substantially across the models. The stress on the C0-1 capsule ligament decreased during cervical flexion and increased during bending and rotating loading. In addition, BDI gradually decreased across the models. Further analysis revealed that the dens showed an increase of 110.1% superiorly and 11.4% posteriorly, indicating an increased risk of spinal cord impingement. Progressive AOJ incongruity critically disrupts supportive tissue loading, enabling incremental atlanto-occipital instability. AOJ dysplasia plays a key biomechanical role in the pathogenesis of type II BI.