A new process using rotary swaging was introduced for the difficult machining of slender shafts for aero-engine. In order to process the square holes in the elongated shaft, the billet meeting the forming requirements were designed and optimized, and the forming parameters were determined. The 3D rotary swaging finite element model was used to simulate the swaging process using the obtained billet, and the internal square hole process was studied experimentally. The dimensions and microhardness after forming were measured and analyzed and the microstructure was observed. The results show that the forming of the square hole in the slender shaft of the aero-engine can be processed by the recessed rotary swaging method with the mandrel, the forming efficiency is high, the forming dimensions of the workpiece meets the requirements, and the influence on the hardness and the microstructure is minor.