In order to reduce the errors in the formation direction (Z axis) during the process of selective laser melting (SLM) of TC4 titanium alloy, the generation and variation of Z axis errors caused by powder melting during the SLM process are investigated. The mathematical models describing the accumulation and compensation of Z axis errors are established, and one corresponding compensation method is proposed. Formation experiments are conducted to verify the effectiveness of these mathematical models. The experimental results indicate that these models can effectively describe the accumulation and changing trends of Z axis errors. With the proposed compensation method from these models, the Z axis error can be greatly reduced. Compared with the traditional Z axis error analysis method, the new model is more accurate, and it provides a reference for the error control and rapid selection of optimal layer thickness in SLM of metal materials in future.