Variation modeling of sheet metal assemblies is quite critical when specifying and verifying the geometric and dimensional requirements of parts. However, sheet metal parts’ compliant behavior makes the variation modeling approach more complex when coupling both rigid variation in the in-plane direction and compliant variation in the out-of-plane direction. In order to completely model the overall three-dimensional variation of sheet metal assembly, a unified variation modeling approach considering both rigid and compliant variations is proposed in this article. Four types of coordinate systems are defined. In the in-plane direction, homogeneous transformation matrix is used to describe the position and orientation relationships between assembly elements, and differential motion vector is used to represent rigid variation. In the out-of-plane direction, a vector composed of the deviations of selected key characteristic points is used to represent compliant variation, and the method of influence coefficients is adopted to analyze compliant variation. The overall three-dimensional variation of sheet metal assembly is the superposition of both in-plane rigid variation and out-of-plane compliant variation. Three types of variation sources that are fixture locators’ deviations, datum features’ deviations and joint features’ deviations are considered here. A case study is presented to illustrate the proposed approach.