Engineering applications of aluminum based metal matrix composites (MMCs) are often limited by their low ductility. An important factor affecting the MMC ductility is the spatial distribution of reinforcements. The present work examines the effect of reinforcement distribution on damage nucleation and evolution, using analytical and finite element models. Enhanced damage nucleation is predicted in regions of reinforcement proximity along the loading direction, while accelerated damage propagation diagonal or perpendicular to the loading direction is expected. Thus, it is important to consider the proximity of reinforcements in all directions in order to understand the overall failure mechanism. A suitable scheme for capturing such dependence, based on local area-fraction contour maps, is developed to characterize the MMC microstructure.