A theory to analyse the strength of composite materials with randomly oriented short fibres has been developed. The short fibres are assumed to be uniformly distributed and randomly oriented in three dimensions. The non-homogeneous deformation within the composite has been taken into account in the strength calculation. The influences of thermal stress in the short fibres, the short-fibre dispersion hardening and the dislocation density in the matrix on the composite strength have all been estimated, and the strengthening mechanisms involved are discussed. A comparison with previous strength theory suggests that the present theory gives a better agreement with experimental data, and can be used to explain some experimental phenomena that remain unsolved.