Numerical simulation of the deformation and damage evolution process of composite modified double base (CMDB) propellant based on the microstructure is of great significance for improving its macro‐mechanical properties. The macro‐mechanical properties and damage evolution of CMDB propellant were studied experimentally and numerically in current work. To establish the correlation between microstructural evolution and the macro‐mechanical response of the propellant, a three‐dimensional microstructure model of the CMDB propellant was constructed utilizing the molecular dynamics particle filling approach. At the interface between RDX particles and the nitrocellulose‐nitroglycerine (NC‐NG) matrix, the conventional cohesive element was replaced by cohesive contact, and the parameters of the cohesive zone model (CZM) at the interface between the particles and the matrix were obtained by parameter inversion based on the Hooke‐Jeeves parameter optimization algorithm. The processes of damage initiation, propagation, convergence, and failure at the cohesive interface were simulated using the bilinear cohesive zone model (BCZM). The results revealed that the fracture strength of NC‐NG propellant with added RDX particles was significantly increased and the fracture elongation was reduced. The three‐dimensional microstructure model can accurately describe the microstructure of CMDB, and dewetting at the interface is the primary cause of propellant degradation when subjected to an external load, which compromises the mechanical properties of the propellant.