An efficient and effective full-wave analysis of the instantaneous and average behaviors of time-modulated arrays (TMAs) in the presence of mutual coupling effects is proposed. It has high computation efficiency for the optimization design of TMAs, especially for non-uniformly spaced TMAs. The proposed approach, using the in-array mutual impedance to describe the effect of mutual coupling, is based on a closed-form mutual impedance expression and a correcting procedure. The closed-form is used to calculate the mutual impedance between two isolated elements in which the effect of the parasitic elements is ignored. Then the correcting procedure which only requires the knowledge of the isolated element input impedance and the mutual impedance of two isolated elements is used to obtain a corrected in-array mutual impedance, in which the interactions between the antennas in the array configuration is involved. Because it makes use of the surface mode currents to calculate the mutual coupling effects, the currents induced on the parasitic elements are naturally involved. Therefore, the corrected in-array mutual impedance is a good approximation of the real one. In addition, the impedance variations can occur in phase-scanned TMAs due to mutual coupling effects, resulting in a significant fraction of the incident power being reflected known as mismatch losses. Based on the proposed approach, an introduced phase-scanned TMA makes use of SP3T switches and optimized time sequences for the element feed to reduce the mismatch losses in comparison with a conventional phase-scanned TMA. To validate the accuracy and efficiency of the proposed approach, examples of the optimization design of uniformly and non-uniformly spaced time-modulated patch arrays for different scenarios are presented. All the results obtained from the proposed approach are given and compared with those from the commercial software.