A method that incorporates the hydrodynamic lubrication analysis into the arbitrary Lagrangian Eulerian (ALE) finite element analysis is developed for steady-state strip rolling simulation. By employing the ALE formulation, only part of thc workpiece, which is subjected to large plastic deformation within the roll-bite region, is modelled, so that thc computational cost is substantially reduced. In the hydrodynamic lubrication formulation, the effect of surface roughness on the lubricant flow is taken into consideration by the use of an average flow model. The friction stress is expressed in terms of forming variables such as surface roughness, lubricant and workpiece properties, film thickness, forming speed and process geometry. Furthermore, the elastic deformation of rolls is also analysed by the boundary element method to avoid the finite element discretization insidc the rolls. Two numerical examples. aluminium and steel strip rolling processes, are presented to demonstrate the merits of the proposed method.