Abstract This work introduces a theoretical formulation and develops numerical methods for finite element implementation of the formulation so as to extend the Concurrent Atomistic-Continuum (CAC) method for modeling and simulation of finite-temperature materials processes. With significantly reduced degrees of freedom, the CAC simulations are shown to reproduce the results of atomically resolved molecular dynamics simulations for phonon density of states, velocity distributions, equilibrium temperature field of the underlying atomistic model, and also the density, type, and structure of dislocations formed during the kinetic processes of heteroepitaxy. This work also demonstrates the need of a mesoscale tool for simulations of heteroepitaxy, as well as the unique advantage of the CAC method in simulation of the defect formation processes during heteroepitaxy.