Some early failures of metal‐on‐metal (MoM) hip replacements associated with elevated wear have caused concerns for the use of this bearing combination. Simulator studies have shown that microseparation and its associated rim contact and edge loading may produce the most severe wear in MoM bearings. It is generally recognized that this high wear can be attributed to the high contact stress of the head on the rim of the cup. In this study, an improved finite element contact model that incorporates an elastic‐perfectly plastic material property for cobalt‐chrome alloy of the metal bearing was developed in an attempt to provide an accurate prediction of the stress and strain for the rim contact. The effects of the microseparation displacement (0.1−2 mm), cup inclination angle (25−65°) and cup rim radius (0.5−4 mm) on the contact stress/strain were investigated. The results show that a translational displacement >0.1 mm under a load >0.5 kN can produce a highly concentrated contact stress at the surface of the cup rim which can lead to plastic deformation. This study also suggests that the magnitude of translational displacement was the major factor that determined the severity of the contact conditions and level of stress and strain under microseparation conditions. Future studies will address the effect of surgical translational and rotational malposition and component design on the magnitude of microseparation, contact stress and strain and severity of wear. © 2014 The Authors. Journal of Biomedical Materials Research Part B: Applied Biomaterials Published by Wiley Periodicals, Inc. J Biomed Mater Res Part B: Appl Biomater, 103B: 1312–1319, 2015.