Currently，the simulation results of most cyclic water flooding reservoirs are better than the observation of the practical cyclic water flooding reservoir.To solve this problem，the capillary hysteresis and cyclic water flooding mechanism considering capillary hysteresis are analyzed by numerical simulation.It is concluded that the water saturation direction in the cyclic water flooding is changed periodically，this means that the reservoir displacement mode alternates the drainage process and imbitition process，and the phenomenon of capillary hysteresis prevail in the reservoir.The capillary hysteresis will generate a new capillary pressure curve which lies in the drainage capillary pressure curve and imbitition capillary pressure curve.The capillary pressure is the main force in cyclic water flooding.When considering the capillary hysteresis，the liquid flux between high permeable layer and low permeable layer and the oil flux between high permeable grid and low permeable grid are less than that of the case not considering the capillary hysteresis （drainage capillary pressure curve is used）.With the consideration of capillary hysteresis，the simulation results correspond to that of the practical reservoir.