Traditional atomization devices always exhibit many drawbacks, such as non-uniform atomization particle sizes, instability of transient atomization quantity and uncontrollability of precise energy, which seriously restrict further practical application of atomization inhalation therapy. The formation and separation process of droplets belongs to a microphenomenon of atomization. The investigation of the droplet formation and separation process will be favorable for understanding the atomization mechanism. In present work, the Conservative Level Set Method (CLSM) is successfully applied on the simulation of the formation and separation of droplets in a medical piezoelectric atomization device induced by intra-hole fluctuation. The intra-hole fluctuation mechanism is systematically explored and analyzed, and also the expression of the volume change in the micro cone hole is built and evaluated. Both the control equation and simulation model of droplet formation and separation process have been well established by meshing the simulation model, and thereby the process of droplet formation and separation is simulated. The corresponding results demonstrate that the breaking time of droplets is decreased with the inlet velocity and liquid temperature rising, while enhanced with the liquid concentration increasing. Meanwhile, the volume of droplet is decreased with the inlet velocity and liquid concentration increasing, but increased with the liquid temperature rising. The velocity of droplet is enhanced with the inlet velocity and liquid temperature rising, and reduced with the increase of liquid concentration. When the large side diameter of micro-cone hole is set as 79 μm, the breaking time of the droplet reaches a minimum value of 38.7 μs, whereas the volume and the velocity of droplet reach a maximum value of 79.8 pL and 4.46 m/s, respectively. This study provides theoretical guidance for the design of medical piezoelectric atomization devices and contributes to the promotion of inhalation therapy in practical use.