In this paper, an application of Arbitrary Lagrangian-Eulerian (ALE) method is presented in plasticity behavior of pressure-sensitive material, with special reference to large deformation analysis of powder compaction process. In ALE technique, the reference configuration is used for describing the motion, instead of material configuration in Lagrangian, and spatial configuration in Eulerian formulation. The convective term is used to reflect the relative motion between the mesh and the material. Each time-step is divided into the Lagrangian phase and Eulerian phase. The convection term is neglected in the material phase, which is identical to a time-step in a standard Lagrangian analysis. The stresses and plastic internal variables are converted to account the relative mesh-material motion in the convection phase. The ALE formulation is then performed within the framework of a three-invariant cap plasticity model in order to predict the non-uniform density distribution during the large deformation of powder die pressing. The plasticity model is based on a hardening rule with the isotropic and kinematic material functions. The constitutive elasto-plastic matrix and its components are derived by using the definition of yield surface, material functions and non-linear elastic behavior, as function of hardening parameters. Finally, the numerical examples are performed to illustrate the applicability of the computational algorithm in modeling of powder forming process and the results are compared with those obtained from Lagrangian simulation in order to demonstrate the accuracy of proposed model.