The stress transfer from broken fibers to unbroken fibers in fiber-reinforced thermosetting polymer-matrix composites and thermoplastic polymer-matrix composites was studied using a detailed finite element model. In order to check the validity of this approach, an epoxy-matrix monolayer composite was used as thermosetting polymer-matrix composite and a polypropylene (PP)-matrix monolayer composite was used as thermoplastic polymer-matrix composite, respectively. It is found that the stress concentrations near the broken fiber element cause damage to the neighboring epoxy matrix prior to the breakage of other fibers, whereas in the case of PP-matrix composites the fibers nearest to the broken fiber break prior to the PP matrix damage, because the PP matrix around the broken fiber element yields. In order to simulate composite damage evolution, a Monte Carlo technique based on a finite element method has been developed in the paper. The finite element code coupled with statistical model of fiber strength specifically written for this problem was used to determine the stress redistribution. Five hundred samples of numerical simulation were carried out to obtain statistical deformation and failure process of composites with fixed fiber volume fraction. The result indicates that the moderate interfacial shear sliding strength can weaken the adverse effect of fiber breaks on composite strength, resulting in the increase of the average strength of composites.