The steady-state nonvolatile two-step, two-color holographic recording performance is studied theoretically for LiNbO3:Cu:Ce based on the two-center model, with taking into account the direct electron transfer between the deep-trap center Cu+/Cu2+ and the shallow-trap center Ce3+/Ce4+ due to the tunneling effect. The results show that the total space-charge field is determined by the space-charge field on the deep-trap center, and the direct electron exchange between the Cu+/Cu2+ and the Ce3+/Ce4+ levels through the tunneling effect dominates the charge-transfer process in the two-step, two-color holographic recording. Therefore, the material parameters related to this direct tunneling process play a key role in the two-step, two-color holography performance.