A closed form solution of a composite mechanics system is performed for the investigation of elastic-plastic behavior in order to predict fiber stresses, fiber/matrix interfacial shear stresses, and matrix yielding behavior in short fiber reinforced metal matrix composites. The model is based on a theoretical development that considers the stress concentration between fiber ends and the propagation of matrix plasticity and is compared with the results of a conventional shear lag model as well as a modified shear lag model. For the region of matrix plasticity, slip mechanisms between the fiber and matrix which normally occur at the interface are taken into account for the derivation. Results of predicted stresses for the small-scale yielding as well as the large-scale yielding in the matrix are compared with other theories. The effects of fiber aspect ratio are also evaluated for the internal elastic-plastic stress field. It is found that the incorporation of strong fibers results in substantial improvements in composite strength relative to the fiber/matrix interfacial shear stresses, but can produce earlier matrix yielding because of intensified stress concentration effects. It is also found that the present model can be applied to investigate the stress transfer mechanism between the elastic fiber and the elastic-plastic matrix, such as in short fiber reinforced metal matrix composites.