The fracture response of cementitious composites containing compliant microencapsulated inclusions and its influence on the fracture process zone (FPZ) are reported. The incorporation of small amounts of phase change material (PCM) microcapsules (replacing up to 10% by volume of sand) is found to slightly improve the strength, fracture toughness, critical crack tip opening displacement (CTODc) and the strain energy release rates. Digital image correlation is used to examine the FPZ at the tip of the advancing crack, to better explain the influences of compliant microscale inclusions on energy dissipation. The FPZ widths are found to slightly increase with PCM dosage but its lengths remain unchanged. The increase in FPZ width is linearly related to the CTODc, showing that inelastic deformations of the crack-tip in the direction of crack opening are indeed influenced by microscale inclusions. It is shown that cementitious systems containing microencapsulated PCMs can be designed to demonstrate mechanical performance (including fracture) equivalent to or even better than their PCM-free counterparts, in addition to the well-described thermal performance.