Abstract: There is a common difficulty in elastic-plastic impact codes such as EPIC^[2,3] NONSAP^[4], etc.. Most of these codes use the simple linear functions usually taken from static problem to represent the displacement components. In such finite element formulation, the stress components are constant in each element and they are discontinuous in any two neighboring elements. Therefore, the bases of using the virtual work principle in such elements are unreliable. In this paper, we introduce a new method, namely, the compatible stress iterative method, to eliminate the above-said difficulty. The calculated examples show that the calculation using the new method in dynamic finite element analysis of high velocity impact is valid and stable, and the element stiffness can be somewhat reduced.