Abstract: The delamination crack propagation in composite panels involving interlaminar short fiber under impact load was studied using geometrically nonlinear finite element method (FEM), based on the total Lagrangian formula. The Newmark method was used to solve the dynamics equation. FEM was improved with an effective virtual crack closure technique to evaluate the energy release rate as the criterion for crack propagation. The crack propagation was simulated by node coupling/partition, while the effect of interlaminar short fibers was simulated by the bidirectional spring elements. The bridging strength between short fibers was thus modified by changing the spring stiffness. Contact elements were set up on crack surface and in the area in contact with impact, with the contact force computed through the penalty function algorithm to analyze the bridging effect of interlaminar short fibers on the crack-tip stress field and energy release rate. The results showed that the bridging effect of interlaminar short fibers can effectively reduce the stress concentration and crack-tip energy release rate, thus toughening significantly the short fibers.