Optical phase conjugation (OPC) is a promising optical technology that can compensate for the distortion due to dispersion and nonlinear effects simultaneously in pulses propagating through a single-mode optical fiber. The pulse propagation characteristics influenced by self-steepening (SS) on the optical fiber system using midway OPC are analyzed theoretically. Dynamic evolution of ultra-short Gaussian pulses in the system is simulated numerically. Effects of SS on the compensation for the distortion are discussed. The results demonstrate that the SS can affect pulse propagation dynamics. The distortion due to the SS cannot be compensated by the OPC. The distortion can be counteracted by the small dispersion.