The mechanical behaviours of fibre reinforced epoxy matrix composites with silica nanoparticles inserted between fibres and matrix subjected to transverse compression are studied by computational micromechanics. A series of representative volume elements of composite microstructures containing fibres, nanoparticles with different distribution types, volume fractions and Young’ modulus; and matrix are established. The effect of nanoparticles incorporated in the interfacial phase on the elastic-plastic behaviour of composites has been assessed. The stress versus strain relationship, ductility and compressive strength are determined by the finite element analysis. It is found that the material property, volume fraction and distribution type of nanoparticles have significant influences on the mechanical behaviour of composites. The large plastic deformation between the fibre and nanoparticles can consume considerable deformation energy, which will enhance the mechanical behaviour of composites.