Abstract Predictions of strength and toughness for short‐fiber‐reinforced plastic systems are complex but industrially crucial problems. In this contribution, we utilize a new approach which accounts for the large stress concentration penalties in a perfectly aligned short‐fiber composite. Although empirical, the approach permits calculation of a strength reduction factor which can then be utilized with an appropriate failure criterion to calculate the strength of a wide range of short‐fiber composite systems. A similar approach is used for the toughness problem, with the fracture toughness of an isotropic, random‐in‐a‐plane, short‐fiber composite being expressed in terms of the fracture toughness of single unidirectionally oriented plies with cracks oriented along the two orthotropic axes. For both strength and toughness, a laminate analogy approach is used. The short‐fiber system is thought of as being composed of several plies or layers, each containing uniaxially aligned short fibers. The plies are oriented in the laminate to replicate the actual system fiber orientation distribution, and the linear stress‐strain or fracture toughness properties are calculated by analyzing the individual ply responses to the overall applied stress. Comparison with experimental data for random‐in‐a‐plane fiber orientation and for biased in‐plane orientations at practical fiber volume loadings shows good agreement. In the case of fracture toughness, there was qualitative agreement between theory and experiment, but the data scatter precluded a rigorous comparison.