In the modeling of microstructural damage mechanisms of composites, damage evolution plays an important role and has significant effects on the overall nonlinear behavior of composites. In this study, a microstructural Monte Carlo simulation method is proposed to predict the volume fraction evolution of damaged particles due to particle-cracking for metal matrix composites with randomly distributed spheroidal particles. The performance function is constructed using a stress-based damage criterion. A micromechanics-based elastoplastic and damage model is applied to compute the local stress field and to estimate the overall nonlinear response of the composites with particle-cracking damage mechanism. The factors that affect the damage evolution are investigated and the effects of particle shape and damage strength on damage evolution are discussed in detail. Simulation results are compared with experiments and good agreement is obtained.