Meshless Shepard interpolation method (MSIM) is used to simulate the destruction process within the arch reinforcement area of tunnel lining. In this method, the shape functions are formed by the partition of unity and the finite cover technology, which is not affected by discontinuous domains, with delta property at any desired node, and applies boundary conditions in an easy and correct way. The MSIM method combines the advantages of both the conventional meshless method and the numerical manifold method. The finite cover technology enables the shape functions to not be affected by the discontinuities in the solution domain, which overcomes the difficulty resulting from the conventional meshless method. The finite covers and the partition of unity functions are formed using the influence domains of a series of nodes, which removes the obstacle from conventional numerical manifold method and has simpler formation of finite covers than numerical manifold method. Virtual crack closure technique is used to calculate the intensity factor of crack-tip stress. The results of progressive destruction process simulation on the cracking patterns within the arch reinforcement area indicate that the method is suitable for tracking the crack propagation in complex stress conditions.