Fracture in metals is controlled by material behavior around the crack tip where size-dependent plasticity, now widely demonstrated at the micron scale, should play a key role. Here, a physical origin of the controlling length scales in fracture is identified using discrete-dislocation plasticity simulations. Results clearly demonstrate that the spacing between obstacles to dislocation motion controls fracture toughness. The simulations support a continuum strain-gradient plasticity model and provide a physical interpretation for that model's phenomenological length scale. Analysis of a dislocation pileup under a stress gradient predicts the yield stress to increase with increasing obstacle spacing, physically rationalizing the simulations.