A review is provided of the use of analytical models and two dimensional (2D) and three dimensional (3D) microstructure based FEM models to accurately predict the properties of particle reinforced composite materials. It is shown that analytical models do not account for the microstructural factors that influence the mechanical behavior of the material. 2D models do capture the anisotropy in deformation behavior induced by anisotropy in particle orientation. The experimentally-observed dependence of Young's modulus and tensile strength is confirmed by the 2D microstructure-based numerical model. However, because of the 2D stress state, a realistic comparison to actual experimental values is not possible. A serial sectioning process can be used to reproduce and visualize the 3D microstructure of particle reinforced metal matrix composites. The 3D microstructure-based FEM accurately represents the alignment, aspect ratio, and distribution of the particles. Comparison with single particle and multiparticle models of simple shape (spherical and ellipsoidal) shows that the 3D microstructure-based approach is more accurate in simulating and understanding material behavior. (c) 2006 Springer Science + Business Media, Inc.