Improvements in the matrix microstructure associated with latex modification of plain and steel-fiber-reinforced concrete materials are assessed. In particular, this study investigates the effects of latex modification of concrete matrix on the microcracking and failure mechanisms. In order to study the process of failure in concrete under increasing stress levels, microscopic investigations were performed on concrete cylinders preloaded to different compressive stress levels. The effects of latex modification of concrete matrix on the microcracking and failure mechanisms were also investigated. Five stress levels were selected. At each stress level, two thin slices, one longitudinal and the other transverse, were prepared and investigated for microcracking characteristics after special surface preparation. Through the use of an image analysis system, three different types of measurements were made: aggregate-interface (bond) crack length per unit area; matrix crack length per unit area; and microcrack orientation defined as the average crack inclinations with respect to the direction of loading. In plain concrete, microcracks were found to be present even before loading, because of factors such as differential shrinkage movements, settlements, and thermal strains between aggregates and cement paste. They appeared dominantly at the coarse aggregate-cement paste interfaces. At higher compressive stress levels, the propagation of microcracks extended from interfaces into the matrix. At peak compressive stress, microcracks had a tendency to interconnect and localize. Latex modification of concrete reduced the microcrack intensities at lower stress levels; this was particularly true for the aggregate-cement paste interface microcracks. Measurements on microcrack orientation revealed that the matrix microcracks were generally oriented less than 20 degrees from the longitudinal axis of the specimen (ie, the direction of loading). At the aggregate-cement interface, the microcrack orientation was random.