A new method using powder simulation was proposed to predict the optimum mechanical conditions of ceramic granules, which clarifies the relation between the mechanical characteristics and compression behavior of the granules. The tri-axial compression of granules was simulated by the three-dimensional particle element method (PEM) in order to obtain Young's modulus and strain-hardening rate of the granule bed, which are important mechanical characteristics for stress analysis in the compact by the finite element method (FEW The relation between deviatoric stress and strain obtained by the simulation agreed well with that by the experiment. Young's modulus and the strain-hardening rate were expressed as a function of minor principal stress and strain, which were determined from the deviatric stress and strain diagrams, and stress analysis in the compression of granules was performed by FEM using these values of the mechanical characteristic. In the analysis, the granular bed was treated as compressible elasto-plastic material. It thus became possible to examine the relation between the mechanical characteristics of single granules and the stress distribution in the compact by these two simulations, and the result of such examination for single granules having arbitrary mechanical characteristics gives useful information for the granule design to obtain homogeneous green compacts.