A new finite element analysis based on rate dependent crystal plasticity theory has been developed to investigate the effects of second-phase particles on the initiation and propagation of localized deformation in the form of shear bands. The new model can incorporate electron backscatter diffraction data into finite element analyses. The numerical analysis not only accounts for crystallographic texture (and its evolution) but also accounts for grain morphologies. A unit-cell approach has been adopted where an element or a number of elements of the finite element mesh are considered to represent a single crystal within the polycrystal aggregate. Second-phase particles in the form of finite elements with stiff elastic properties are randomly distributed within the unit cell. Numerical simulations of unixial tension, in-plane plane strain tension, and balanced biaxial tension have been performed by models with and without second-phase particles for a direct chill-cast AA5754 aluminum alloy sheet. The effects of various parameters, such as second-phase particle distribution, texture evolution, and strain paths on particle induced localized deformation patterns, are also investigated.