The aim of this work is to identify the limits of the hole-flanging process experimentally and numerically by a physically based approach of damage for two different aluminium alloy sheets. Two hole-flanging conditions were considered, namely hole-flanging without ironing in which the flange is formed by edge stretching, and hole-flanging with ironing in which the metal is squeezed between the punch and the die. The forming defects were characterized experimentally by scanning electron microscope observations performed in critical zones of the flanged parts. The forming defects were also predicted numerically by a 3D finite element model based on Gurson-Tvergaard-Needleman constitutive equations. To evaluate the accuracy of the developed finite element model, material damage distribution within the workpiece during the process was studied and compared with experimental observations. Furthermore, the effects of the clearance-thickness ratio on the damage behaviour were investigated for different diameter of the initial hole. This study provides relevant and new results in the design of many parts obtained by holeflanging. Results showed that the model predicts accurately all types of failures (orange peel aspect, necking, microvoids, tear) for different conditions and both materials. Moreover, despite the large deformation induced by ironing, such conditions decrease the damage, due to void closure effects, that is in agreement with experimental results.