Brittle nature of gypsum restrains its wide application in construction industry. For improvement, a novel type of composite material, gypsum-based engineered cementitious composites (GS-ECC), was developed using specially chosen polyethylene (PE) fibers. This study investigated the rheological and mechanical properties of GS-ECC, that is, workability, uniaxial tensile and compressive behavior, flexural strength, etc The investigation showed that GS-ECC possessed excellent tensile strain-hardening behavior and saturated cracking characteristics with the average tensile strain capacity more than 5%. To explore the underlying mechanism, the microstructure of interface transition zone (ITZ) between gypsum crystals and PE fibers were investigated through the use of SEM. Single fiber pull-out test, bending-fracture test, and single crack tension test were conducted to investigate the mesoscopic properties from fiber/matrix interface to matrix toughness and fiber bridging capacity. This study demonstrates the feasibility of achieving strain-hardening gypsum-based composites by adding the PE fibers.