AlH3 has gained considerable attention as a fuel additive due to its ability to offer high specific impulse and superior combustion performance. However, few studies have focused on the fragmentation and agglomeration behavior of AlH3. This study investigated the effects of fragmentation of AlH3 and AlH3/PVDF particles on the thermal decomposition, ignition, agglomeration, and combustion of HTPB propellants. Thermal analysis indicated that AlH3 and AlH3/PVDF can accelerate the decomposition of ammonium perchlorate by abundant active sites for the adsorption of the decomposition intermediates. Single-particle combustion uncovered the mechanism behind the directional spray of molten Al from the AlH3 particle and the fragmentation of the AlH3/PVDF particle. The melting of porous Al induces particle shrinkage due to solid-liquid interfacial tension and the structural restoration of the oxide shell, which consequently results in the sealing of cracks in the oxide shell of AlH3. Additionally, the accumulation of internal tensile stress leads to the reopening of these cracks and the directional ejection of the molten Al. The flexible oxide shell contributes to a smaller minimum normalized diameter of the AlH3/PVDF particle, aiding in the generation of internal tensile stress, while the sublimation of AlF3 induced the fragmentation. Synchrotron-based X-ray imaging revealed the formation of aggregates promoted by molten Al, the splitting of AlH3 aggregates due to hydrogen explosion, and the enhanced fragmentation of AlH3/PVDF due to the synergistic effect of hydrogen explosion and the sublimation of AlF3. Compared to raw particles, the CCPs (condensed combustion products) of SP2 propellant display a 48% reduction in average size (D50 = 24.5 μm), whereas there is an over 89% decrease in particle size for the CCPs of SP3 propellant (D50 = 5.14 μm). This study contributes to understanding the fragmentation of AlH3 and AlH3/PVDF upon ignition and combustion, providing valuable insights for the development and optimization of propellants containing AlH3.