The cold ironing process of a warm forged spur gear was applied to investigate the elastic distortions arising by the behavior of die elastic expansion and gear elastic recovery in this article. An elasto-plastic finite element simulation was performed to analyze the elastic behavior characteristics of gear and die. The effects of interference between gear and die on the elastic distortions were investigated through finite element simulation and experiment, respectively. The change of geometrical profile and dimension of the gear tooth were measured; the estimated dimension of ironed gear by finite element simulation was fitted to the experimental results well within the range of 5% relative error. Furthermore, in order to improve the dimensional accuracy of final forged gear, this study proposed a die cavity compensation method to compensate cavity of the ironing die, which was obtained by shrink fitting a outer ring into the initial ironing die. The optimum radial interference between stress ring and initial shrink-fitted die was calculated based on the Lame formula and thick wall cylinder theory. Finally, an experiment according to the proposed die cavity compensation method was carried out to examine the validity of analytical results and demonstrated that predicted dimensions could be achieved and dimensional accuracy greatly improved. It was shown that the manufacture gear satisfies the IOS6 class by measuring the iron-forged gear.