Rolling Contact Fatigue (RCF) is harmful and inevitable to bearings and usually results in the initiation of subsurface damage. This paper focuses on the cumulative mechanism of subsurface damage in bearing steels arose from cementite during RCF. The distribution of subsurface shear stress in bearings was investigated by finite element simulations. A two-phase atomic model of bcc-Fe and cementite was built. Ten alternating shear load cycles were applied when the model was initially in the elastic, elastic-plastic and plastic stages, respectively. The results show that cyclic softening diversely occurs in all three types of stress responses, and the progress of plastic accumulation depends on the amplitude of cyclic load and cycles. Severe shear deformation eventually leads to the damage of the cementite phase, which might be the microscopic mechanism of the fatigue failure of bearing steels. The conclusions presented have general applicability to brittle inclusions in bearing steels.