Much of the fatigue damage in aircraft structures can be linked to the stress concentration arising at the rivet/skin interface in fuselage lap-joints. Fatigue damage can degrade the strength of the structure and reduce structural integrity. The stress distribution around the rivet holes, which depends on several loading conditions, is therefore of prime importance. Critical manufacturing process variations must be taken into account to observe the effect on local stresses at the hole. This paper presents three-dimensional (3D) nonlinear finite element analyses to investigate the stress state at rivet holes in fuselage lap joints. Initially, a 3D single rivet model of the riveting process was developed to characterize the unsymmetric residual stress distribution resulting from rivet installation. Then a global three-rivet model of the fuselage lap-joint, which takes into account the residual stresses from rivet installation and fuselage pressurization, was analyzed and compared to observations available from teardown inspection. The models were then implemented to observe the effects of rivet interference, sealant, and drill shavings on the stress state. A multiaxial fatigue criterion was implemented to predict cycles to crack nucleation for the modeled parameters. The effect of underdriven rivets and sealant were observed to be the most critical on the stress state of the fuselage splice. Excellent comparison with the damage characterization of the fuselage lap-joint provides validation to the finite element model.