The purpose of this research is to study and develop the formulation of a rheological law for composite materials with elasto-plastic behaviour in cold compression. Starting from the generally known relationships in literature, the hypoelastic model proposed for the composite materials behaviour (as powder materials) has been developped/explained, ensuring the understanding of the research. The hypolastic theory has been used for modeling the continuous transition from elastic to plastic state for a powder material. The material behaviour is described through an isotropic tensor relationship between the deformation speed tensor, Cauchy�s stress tensor and its derivative in relation to time (the Jaumann�s derivative). Only the linear part has been used from the general form of the law which depends on scalar functions. The calculations lead to relationships depending on five parameters which are identified according to experimental data. A numerical simulation of the stress-strain evolution during the simple compression of a diepressed powder sample is made; the numerical simulation has been validated by the experimental results.