Bioinspired nanocomposites aim to mimic the structure of natural materials. These materials exhibit excellent mechanical properties such as high strength, toughness, and stiffness. Using modeling and simulation, we can gain insight into the underlying mechanisms that control the properties of these materials, study the impact of various parameters on their performance, and design new materials with high performance. This study investigates a bone-inspired nanocomposite that consists of two subunits: Subunit-A (Mineralized Collagen Fibril) and Subunit-B (Extrafibrillar Matrix). Subunit-B provides the composite with stiffness before yielding. After yielding, Subunit-A stretches to accommodate the deformation up to the final failure. The adhesive material in the interface plays an important role in this nanocomposite’s failure. The composite’s toughness is enhanced by multiple mechanisms: diffuse damage in Subunit-B, strain relaxation around crack tips through horizontal interface delamination between the subunits, and the crack bridging role of Subunit-A. This study provides insight into the mechanical behavior of bone-inspired nanocomposites under tensile loading conditions, highlighting the importance of the adhesive phase in optimizing the material performance in various applications.