In recent years, cohesive elements based on the cohesive zone model (CZM) have been increasingly used within finite element analyses of adhesively bonded joints to predict failure. The cohesive element approach has advantages over fracture mechanics methods in that an initial crack does not have to be incorporated within the model. It is also capable of modelling crack propagation and representing material damage in a process zone ahead of the crack tip. However, the cohesive element approach requires the placement of special elements along the crack path and is, hence, less suited to situations where the exact crack path is not known a priori. The extended finite element method (XFEM) can be used to represent cracking within a finite element and hence removes the requirement to define crack paths or have an initial crack in the structure. In this article, a hybrid XFEM-cohesive element approach is used to model cracking in the fillet area using XFEM where the crack path is not known and then using cohesive elements to model crack and damage progression along the interface. The approach is applied to the case of an aluminium-epoxy single lap joint and is shown to be highly effective.