Numerical modeling of the rock-bit interaction process in laminated formation has been performed using a finite element approach. A finite element program was developed with the assumption of plane strain. Anisotropic elements, dynamic, loading, progressive failure, and variable stiffness were used to represent the actual penetration process. The Hoek and Brown failure criterion was used in the failure analysis. An interation method, using an incremental approach, has been applied for the continuous tooth penetration process where displacements, axial loads, strength and stiffness of elements are modified after each iteration. The program provides quantitative information on stress, displacement, and rock failure for each iteration. Furthermore, deviation due to laminated formation can be inferred and the effects of changing bit geometry can be assessed. The model also shows good quantitative agreement with laboratory wedge indentation tests.