Numerical simulation tests were carried out using the distinct element method (DEM) by paying much attention to the micro-deformation mechanism leading to the development of shear bands. To do this, the conventional DEM was modified slightly such that the effect of rolling resistance at contact points could be taken into account (called MDEM). It is found that MDEM can be a powerful tool for simulating not only the generation of large voids inside a shear band but also the high gradient of particle rotation along the shear band boundaries, in a quite similar manner to those observed in natural granular soils. It is concluded, based on the numerical simulation tests, that the basic micro-deformation mechanism ending up with the formation of shear bands is in the generation of a column-like structure during the hardening process and its collapse in the softening process,