The pore pressure cohesive element was used to simulate the hydraulic fracturing process in layered-fractured-plastic formations. The effects of formation modulus, natural fractures, and formation plasticity on the propagation behaviors of hydraulic fracture were investigated. The results show that the internal stress induced by the incompatible deformation between adjacent formations controls the hydraulic fracture propagation in layered formations. The natural fractures in bounding formation can facilitate the initiation and propagation of hydraulic fracture in fracturing formation, and the connectivity of natural fractures determines the propagation mode of hydraulic fracture (i.e., tensile failure or shear failure). The formation plasticity can inhibit the hydraulic fracture propagation but on the other hand can facilitate its propagation in adjacent formation.