The purpose of this paper is to present the theory of powder metallurgy (PM) materials in cold and hot forming, and its application to computer modeling of powder technology processes. The study is both a review and a research article. The theory presented can be treated as a review paper. The experimental as well as numerical investigations can be treated as a research paper. In the example a simple compression of a cylindrical PM specimen is considered. Numerical calculations are performed by using the finite element method. Iron PM specimens have been used for experimental studies.