Syntactic foams with hollow glass microspheres embedded in an epoxy matrix are used in marine, aerospace and ground transportation vehicle applications. This work presents an in situ experimental study of failure mechanisms in syntactic foam based on X-ray microcomputed tomography with uniaxial compression. Under different levels of compressive strain, the material was scanned using X-ray microcomputed tomography to obtain three-dimensional (3D) images of its internal microstructure. Experiments with the same parameters were carried out to investigate repeatability. The microscopic observations have suggested that damage nucleation occurs at the weakest microspheres. When applied strain increases, shear collapse bands (SCBs) develop local to the fragmented microspheres due to stress concentration and bending deformation around SCBs occurs. After significant strain, the thickness of the SCBs increases owing to the accumulation of the broken microspheres. The relationship between the volume fraction of microspheres and applied bulk strain has been characterised.