For the purpose of improving computer simulation of granular materials, a three-dimensional discrete element model using random arrays of elastic ellipsoidal particles is developed. Major technical implementations relating to the development of this new numerical model (computer code ELLIPSE3D) include the contact detection algorithm based on a geometric potential concept, elastic contact laws based on Hertzian theory and Mindlin's solution, geometric representation and kinetic computation for ellipsoidal particles, and the explicit finite difference scheme for 3-D rotational kinematic equations of ellipsoids. Numerical results produced by ELLIPSE3D show the important effects of particle shape on shear strength, deformation behaviour and fabric statistics of particle arrays. These results demonstrate that using nonspherical particles in a discrete element model improves the simulations of granular materials and creates the possibility to study the effect of particle shape on engineering properties systematically.