The synthetic aperture focusing technique (SAFT) with significant improvements in lateral resolution has been adapted for ultrasound imaging of multilayer objects. To apply SAFT to imaging of cylindrical objects such as solid axles or pipes with small diameter, exterior cylindrical scan is much preferred. In this paper, a frequency-domain algorithm is proposed for such cylindrical scan performed with an exterior rotating transducer. The algorithm is derived from Fourier-domain solutions to the waveequation in cylindrical coordinates, and then extended to the multilayer case. A simulation model for multilayer structure is established, and the algorithm is demonstrated for both simulated and experimental data. Compared with the raw images, the reconstructed images with proposed algorithm attain better lateral resolution for multilayer objects. It is shown that the attainable angular resolution for each layer is approximately consistent with that achieved in the single-layer case, as long as the transmission factors are approximately uniform within the divergence angle of the transducer. The performance of proposed algorithm is verified with experimental C-scan image and demonstrates that it is capable of improving the lateral resolution in both scanning directions.