The 12.7mm projectile may remain intact or be broken during penetrating steel targets with different strength. However, previous simulations were limited to simulating a single situation. To overcome this limitation, a study on the numerical simulation method of 12.7mm projectile penetration into steel targets was carried out to propose a projectile-target model which is able to model both the intact and broken cases. In the intact projectile case, the ballistic tests were implemented to study the dynamic behavior of 12.7mm projectile penetrating into the 603 steel targets. Two different modeling algorithms, which were the finite element method (FEM) and the smooth particle hydrodynamics particles (SPH) method, were compared with the experimental results. Then the influence of finite element and particle sizes on the numerical results was studied to establish the numerical model to simulate the intact projectile case. Furthermore, the established model was applied to simulate the broken projectile case by changing the target material and the element sizes. The numerical results were compared with the experimental results. The numerical study shows that the projectile and target should be discretized using FEM and SPH, respectively, for simulating the intact case. Meanwhile, a large ratio between the finite element mesh size and SPH particle spacing should be used, such as 5.3. Otherwise, an abnormal numerical deformation may occur around the projectile head, which is inconsistent with the experimental result. This model can also be used to simulate the broken projectile case, which is verified with the experimental results. However, the large ratio between finite element mesh size and SPH particle spacing leads to numerical problem and abort of simulations. To overcome this difficulty, a FEM/SPH coupled projectile-target model is proposed, in which the projectile is discretized using coarse mesh close to the surface and fine mesh in the core region. Numerical results show that the proposed projectile-target model can be used to model the penetration process no matter the projectile remains intact or broken.