We have developed a new method of analysis to describe the propagation of induced fluid-driven fractures in rock masses which contain pre-existing discontinuities such as joints, bed interfaces, lens boundaries, etc. The analysis is based on a 2-D model, with coupled solid mechanics, fracture mechanics and fluid mechanics. The solid and fracture mechanics are solved by an implicit finite-element approach which provides for mixed-mode (I and II) fracture propagation in arbitrary stress fields. The fluid mechanics capability first was established for steady-state conditions, using a finite-element formulation for flow between parallel surfaces. This initial coupling resulted in the version 1.0 of the FEFFLAP model (Finite Element Fracture and Flow Analysis Program). This version was verified against analytical solutions, and tested for validation against results of hydrofracturing in blocks of rock simulants containing an interface, under biaxial loading, as described in Part 2, the companion paper to this publication. The developments were then extended to the time-dependent domain by replacing the original fluid flow model with a model based on the FAST fluid dynamics module. The pressure profile inside the crack and the crack velocity are provided by a 1—D analytical formulation, corresponding to a constant-height fracture. Both arbitrary flow rate and borehole pressure conditions can be simulated; these may correspond, respectively, to conventional two-wing hydrofracturing and gas-driven tailored-pulse loading for multiple fractures. The model has been verified against analytical time-dependent solutions for fracturing in permeable and impermeable media. The new coupled model also has been validated against controlled physical tests involving hydrofracturing of blocks containing sandstone lenses, with the blocks loaded independently in three orthogonal directions. These tests are also described in Part 2 (Int. J. Rock Mech. Min. Sci. & Geomech. Abstr. 27, 255–268, 1990). These new analysis tools can be used for a wide variety of applications such as obtaining a better understanding of the stimulation of unconventional gas reservoirs, i.e. lenticular sandstones, coal beds and Devonian shales, or making improvements in the design of underground waste disposal by hydrofracturing or enhancing the fracturing og geothermal reservoirs.