This paper presents an investigation of computer simulation to analyze the effects of plastic damage on the formability of VDIF steel under both proportional and non-proportional loading conditions. The simulation is carried out using LS-DYNA incorporated with a newly developed damage mechanics model and its damage criterion. Three forming processes, uniaxial tension, plane-strain deformation and biaxial stretching, are examined and deformation profiles are calculated and plotted. Finally, the forming limit strains are predicted for both proportional and non-proportional loading conditions, which are found to be in agreement with the test results.