During fatigue of Kaowool fiber reinforced aluminum composites at 20 degreesC, cracks are initiated at hollow Kaowool particles. The stress concentrations associated with these particles arise from two sources: (i) residual stresses due to differential thermal contraction of the Kaowool and aluminum and (ii) the applied cyclic fatigue stress. These stresses are calculated from a finite element model which incorporates plasticity of the aluminum matrix. In general, the mechanical stresses are considerably larger than the thermal stresses. The total stress, in both the aluminum matrix and the Kaowool particle, increases with decreasing particle wall thickness and the proximity of the particle to the surface. In general, the stress concentrations in the aluminum matrix are more critical than those in the Kaowool particles, and are predicted to exceed locally the yield strength of 339 aluminum for all values of wall thickness. The particles observed experimentally at the fatigue fracture origins are thin walled and close to the surface, in quantitative agreement with the predictions of the finite element model.