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Rock yielding may well take place during hydraulic fracturing in deep reservoirs. The prevailing models based on the linear elastic fracture mechanics (LEFM) are incapable of describing the evolution process of hydraulic fractures accurately. In this paper, a hydro-elasto-plastic model is proposed to investigate the hydraulic fracture propagation in deep reservoirs. The Drucker–Prager plasticity model, Darcy's law, cubic law and cohesive zone model are employed to describe the plastic deformation, matrix flow, fracture flow and evolution of hydraulic fractures, respectively. Combining the embedded discrete fracture model (EDFM), extended finite element method (XFEM) and finite volume method, a hybrid numerical scheme is presented to carry out simulations. A dual-layer iterative procedure is developed based on the fixed-stress split method, Picard iterative method and Newton–Raphson iterative method. The iterative procedure is used to deal with the coupling between nonlinear deformation with fracture extension and fluid flow. The proposed model is verified against analytical solutions and other numerical simulation results. A series of numerical cases are performed to investigate the influences of rock plasticity, internal friction angle, dilatancy angle and permeability on hydraulic fracture propagation. Finally, the proposed model is extended to simulate multiple hydraulic fracture propagation. The result shows that plastic deformation can enhance the stress-shadowing effect. [ABSTRACT FROM AUTHOR]