A new numerical model is proposed for simulating the mechanical behavior of unidirectional composites which is based on a three-dimensional (3D) shear-lag model. The 3D shear-lag model considers the micro-damage phenomena of interfacial debonding and interfacial yielding. In order to confirm the validity of the model, the calculated stress concentration is compared with the HVD model (Hedgepeth JM, Dyke P. Local stress concentrations in imperfect filamentary composite materials. J Comp Mater 1967;1:294-309) in the appropriate limit. Monte Carlo simulations with the present shear-lag model were then conducted to obtain the ultimate tensile strength (UTS) as a function of fiber strength and interfacial properties. The damage progression and formation of clusters versus the type of interfacial damage, and the size-scaling of the tensile strengths, are carefully examined. Coupled with a size-scaling analysis, model predictions for tensile strength show good agreement with experiment. (C) 2001 Published by Elsevier Science Ltd. All rights reserved.