The influence of surface roughness and compression ratio on the lateral surface microcracks of the compressed specimens of Ti-3Al-5Mo-4.5V titanium alloy (BT16) has been investigated by cold upsetting experiments, scanning electron microscopy (SEM) and optical microscopy (OM). The results show that the rolled and annealed α+β BT16 alloy bars with the finest equiaxed grains have the good cold upsetting performance. With the increasing of compression ratio and surface roughness, the lateral surface microcracks gradually increase. The lateral surface of the cold upsetting specimens and bolts is without macrocracks when the compression ratio reaches 75%, but under high magnification lateral surface microcracks can be distinctly observed, which are entirely different from common macrocracks. Surface quality of cold upsetting fasteners was evaluated and the relation between lateral surface roughness, microcracks and compression ratio was determined in cold upsetting test.