By solving Milburn equation, the dynamical properties of quantum entanglement and average fidelity in Heisenberg spin chain model with nonlinear interaction are investigated. The effects of nonlinear interaction and different initial states on the quantum entanglement and average fidelity decoherence are discussed. Results show that the conditions for system in ferromagnetic or antiferromagnetic are different on change of quantum entanglement versus nonlinear interaction. When the interaction is in ferromagnetic state, the entanglement change is more obvious than that of the antiferromagnetic entanglement. Different initial states correspond to different average fidelity. The choice of initial state can affect the quantum communication characteristics of the system.