A new moment-modified polynomial dimensional decomposition (PDD) method is presented for stochastic multiscale fracture analysis of three-dimensional, particle-matrix, functionally graded materials (FGMs) subject to arbitrary boundary conditions. The method involves Fourier-polynomial expansions of component functions by orthonormal polynomial bases, an additive control variate in conjunction with Monte Carlo simulation for calculating the expansion coefficients, and a moment-modified random output to account for the effects of particle locations and geometry. A numerical verification conducted on a two-dimensional FGM reveals that the new method, notably the univariate PDD method, produces the same crude Monte Carlo results with a five-fold reduction in the computational effort. The numerical results from a three-dimensional, edge-cracked. FGM specimen under a mixed-mode deformation demonstrate that the statistical moments or probability distributions of crack-driving forces and the conditional probability of fracture initiation can be efficiently generated by the univariate POD method. There exist significant variations in the probabilistic characteristics of the stress-intensity factors and fracture-initiation probability along the crack front. Furthermore, the results are insensitive to the subdomain size from concurrent multiscale analysis, which, if selected judiciously, leads to computationally efficient estimates of the probabilistic solutions. (C) 2010 Elsevier Ltd. All rights reserved.