Background: The complicated basilar invagination and atlantoaxial dislocation (BI-AAD) can cause a variety of neurological symptoms. Active treatment should be given. The main method of surgical treatment is to relieve the compression of the ventral bone of the brain stem and to fix the unstable spinal segments for fusion. At present, more surgical methods choose modified posterior cervical reduction and internal fixation fusion. Objective: The clinician has preliminarily designed an internal occipital fixation system capable of restoring both horizontal and vertical AADs, and proposed a new compression and distraction reduction (CDR) technique. The feasibility and effectiveness of posterior AAD reduction surgery using CDR techniques for different types of patients were studied in this paper. Methods: First, according to the CT scan sequence images of the congenital BI-AAD patient's cervical vertebra, the software Materialize Mimics 13.1 was imported to reconstruct 3D geometric model of cervical spine (C0-C7). Then the geometric topology model was carried out in Geomagic2012 software, and surrounding soft tissue was established using SpaceClaim 14.0. The 3D finite element model (FEM) of cervical vertebra for congenital BI-AAD patients was obtained by assigning material attributes, setting contacts and mesh in ANSYS 14.0. To simulate the physiological activities of the spine under two conditions of forward flexion and backward extension, preoperative verification was carried out with the maximum displacement parameter. According to the postoperative CT data of the patient, the position and degree of freedom (DOF) of the occipitocervical internal fixation system were determined. The FEM of the occipitocervical internal fixation system was established by dividing unit grid in ANSYS. Using multiple loading step of statics analysis method, the CDR technology of posterior AAD reduction surgery was simulated. When the atlantoaxial horizontal and vertical reductions were satisfactory, the displacement data were obtained and verified using the post-operative data. Results: The cervical spine (C0-C7) FEM of congenital BI-AAD patients was established. For some lateral atlantoaxial articulation abnormal ossification II, we simulated the CDR technique for the AAD reduction surgery and proposed using the vertical traction instead of vertical reduction. Conclusion: This study confirms the feasibility and effectiveness of posterior AAD reduction surgery using CDR techniques and proposes the different reduction optimization scheme for the patients with lateral atlantoaxial articulation abnormal ossification II of congenital BI-AAD. The results of this study provide a biomechanical theoretical basis for improving the reliability of simple posterior reduction surgery and optimizing the surgical treatment of BI-AAD. © 2020 World Scientific Publishing Company.