<p>We propose a new area-based peridynamic (ABPD) model for failure analysis of materials. Area elements are adopted as the basic deformation component of continuum in the theory of ABPD. Basic deformation modes of the area elements, i.e. the normal and the shear, are considered to describe the geometric relationship of materials. The peridynamic (PD) formulations are derived based on the principle of virtual displacements by using the Total Lagrangian formulation, and the constitutive relationship are characterized by a micromodulus matrix that depends on the mechanical properties of materials. The critical strain energy release rate for crack propagation is used in the ABPD analysis. With such treatments, isotropy and anisotropy are unified under the same theoretical framework of ABPD, and element stress and strain is accessible for interpreting the results of ABPD. The restrictions of traditional PD theories, such as Poisson’s ratio, zero-energy mode and etc., can be avoided. In addition, rectangular grid discretization is allowed in the ABPD model in contrast to other PD theories, thus the deformation and damage of materials can be simulated with high computational efficiency. The capability of the developed ABPD model was demonstrated by the stretch examples of plates with different Poisson’s ratio and laminae with different fiber orientation, and damage and stress analysis was further conducted to demonstrate the capability of ABPD in replicating the damage process of materials.</p>