In this study, a novel three-dimensional micro-mechanical crystal-level model for the analysis of intergranular degradation and failure in polycrystalline materials is presented. The polycrystalline microstructures are generated as Voronoi tessellations, that are able to retain the main statistical features of polycrystalline aggregates. The formulation is based on a grain-boundary integral representation of the elastic problem for the aggregate crystals, that are modeled as threedimensional anisotropic elastic domains with random orientation in the three-dimensional space. The boundary integral representation involves only intergranular variables, namely interface displacement discontinuities and interface tractions, that play an important role in the micromechanics of polycrystals. The integrity of the aggregate is restored by enforcing suitable interface conditions, at the interface between adjacent grains. The onset and evolution of damage at the grain boundaries is modeled using an extrinsic non-potential irreversible cohesive linear law, able to address mixed-mode failure conditions. The derivation of the traction-separation law and its relation with potential-based laws is discussed. Upon interface failure, a non-linear frictional contact analysis is used, to address separation, sliding or sticking between micro-crack surfaces. To avoid a sudden transition between cohesive and contact laws, when interface failure happens under compressive loading conditions, the concept of cohesive-frictional law is introduced, to model the smooth onset of friction during the mode II decohesion process. The incrementaliterative algorithm for tracking the degradation and micro-cracking evolution is presented and discussed. Several numerical tests on pseudo-and fully three-dimensional polycrystalline microstructures have been performed. The influence of several intergranular parameters, such as cohesive strength, fracture toughness and friction, on the microcracking patterns and on the aggregate response of the polycrystals has been analyzed. The tests have demonstrated the capability of the formulation to track the nucleation, evolution and coalescence of multiple damage and cracks, under either tensile or compressive loads.