Stress fields and failure mechanisms have been investigated in composites with particles either surface treated or untreated under uniaxial tension. Previous experimental observation of failure mechanisms in a composite with untreated particles showed that tensile cracks occurred mostly at the polar region of the particle and grew into interfacial debonding. In a composite with surface-treated particles, however, shear yielding and shear cracking proceeded along the interphase-matrix interface at the polar area of the matrix and thus may improve the mechanical behaviour of the material. The finite element calculations showed that octahedral shear stress at the polar and longitudinal areas of the particle treated by coupling agents is much larger than that of materials with untreated particles, and the shear stress distribution around the interface is sensitive to the interphase property. The results suggest that a th ree-phase model can describe the composites with surface-treated fillers.