In the present paper, a novel method using the special 2D finite element method (FEM) and the concept of equivalent homogeneous materials has been employed to evaluate the effective material properties of composites. Special 2D finite elements containing an internal defect or reinforcement have been well developed in order to greatly simplify the numerical modeling of composites. It can assure the high precision especially in the vicinity of defects or reinforcements in composite materials. Some numerical examples will be provided to demonstrate the validity and versatility of the proposed method by comparing the existing results from other literatures. (C) 2003 Elsevier B.V. All rights reserved.