The behavior of laterally loaded piles is an important problem for engineering practices such as seismic resistant design of pile foundations. In this study, PFC3D (Itasca 2008) is used to simulate the process of pile installation and lateral movement, with the objective to investigate the boundary effects on the simulation results. The theory for cavity expansion was first employed to examine the boundary effects of a confined model. A parametric study was then carried out in PFC3D with varying size of models. The results show that the DEM simulations would provide reasonable results when the model size exceeds 40 times of the pile diameter.