This paper treats the numerical analysis of the deformation behavior of liquid after head-on collision of two droplets. The simulation of the liquid deformation process has been performed using the MAC-type solution method to solve a finite differencing approximation of the Navier-Stokes equations governing an axisymmetric incompressible fluid flow. When a water droplet collides head-on into another one with small initial Weber numbers, two droplets coalesce and remain permanently united. For larger Weber numbers, two droplets merge temporarily and subsequently separate into two or more drops. The calculated free surface configurations have been in qualitative agreement with the experimental results observed by other researchers. Also, the critical Weber number to predict coalescence/separation of liquid after head-on collision has agreed with the experimental data. The details of droplet deformation mechanism have been discussed from a qualitative as well as quantitative point of view.