The piles used for jacket type foundation for an offshore wind turbine are subjected to highly cyclic tension and compressive loading. The pile capacity under cyclic axial loading decreases with number of loading cycles due to the reduction of pile shaft resistance. A numerical simulation scheme is presented, which allows the calculation of pile capacity degradation (CDM) due to cyclic loading for driven steel piles. The volume compaction of soil near pile surface during the cyclic loading is determined from cyclic simple shear test results and is then applied to the pile-soil system. From the limited number of tests available, interaction diagrams have been developed, which give the number of load cycles leading to failure dependent on the mean load and the amplitude of the cyclic load portion, both related to the static pile capacity. However, such diagrams cannot account for different soil conditions or pile geometry and pile stiffness. The calculation results for piles with three different embedded lengths in sandy soil under cyclic loading in tension are presented and compared with the existing interaction diagrams. Finally, recommendations regarding necessary further investigations and improvements of the method are given.