In this work the incorporation of damage in the material behavior is investigated. Damage is incorporated into the generalized cells model (GMC), and applied to metal-matrix composites (MMCs). The local incremental damage model of Voyiadjis and Park is used here in order to account for damage in each subcell separately. The resulting micromechanical analysis establishes elasto-plastic constitutive equations that govern the overall behavior of the damaged composite. The elasto-plastic constitutive model is first derived in the undamaged configuration for each constituent of the metal-matrix composite. The plasticity mode! used here is based on the existence of a yield surface and flow rule. The relationships are then transformed for each constituent to the damaged configuration by applying the local incremental constituent damage tensors. The overall damaged quantities are then obtained by applying the local damage concentration factors obtained by employing the rate of displacement and traction continuity conditions at the interface between subcells and between neighboring repeating cells in the generalized cells model. Examples are solved numerically in order to explore the physical interpretation of the proposed theory for a unit cell composite element. (C) 1997 Elsevier Science Limited.