Satellite retroreflector is used as laser ranging cooperative target to improve the intensity of reflected beam, which has close relationship with processing parameters of the retroreflector. Based on geometrical structure of retroreflector and vector form of reflection-refraction law, mathematical models with phase distribution of returned beam, and far-field diffraction pattern (FFDP) are built up for retroreflector with dihedral angle error and flatness error. As for retroreflector with circular section, FFDP under different incident conditions of laser beam, dihedral angle error and flatness error is simulated. Meantime, the rules of their effect on FFDP are analysed at length. Simulated results express that the divergence of FFDP is increased with dihedral angle error, flatness error and laser incident angle. In terms of FFDP and velocity aberration compensation theory, a new method of using dihedral angle offset for compensating velocity aberration in large observation range is put forward.