The strong continuous fiber reinforced metal matrix composites (MMCs) are recently used in aerospace and transportation applications as an advanced material due to its high strength and light weight. Unidirectional fiber-metal matrix composites have superior mechanical properties along the longitudinal direction. However, the applicability of continuous fiber reinforced MMCs is somewhat limited due to their relatively poor transverse properties. Therefore, the transverse properties of MMCs are significantly influenced by the properties of the fiber/matrix interface. In order to be able to utilize these MMCs effectively and with safety, it must be determined their elastic plastic behaviors at the interface. In this study, the interfacial stress states of transversely loaded unidirectional fiber reinforced metal matrix composites investigated by using elastic-plastic finite element analysis. Different fiber volume fractions $(5-60\%)$ were studied numerically. The interlace was treated as three thin layer (with different properties) with a finite thickness between the fiber and the matrix. The fiber is modeled as transversely isotropic linear-elastic, and the matrix as isotropic elastic-plastic material. Using proposed model, the effects of the interface region and fiber arrangement in MMCs on the distributions of stress and strain are evaluated. The stress distributions of a thin multi layer interface have much less changes compared with conventional perfect interface. The analyses were based on a two-dimensional generalized plane strain model of a cross-section of an unidirectional composite by the ANSYS finite element analysis code.