This paper presents an attempt to address an intriguing question about the role of fine particles in altering wave propagation in granular media from the micromechanical perspective. Special effort is made to examine whether the state dependency of shear wave velocity can be characterised in a unified manner and to establish micromechanical understanding on the observations from recent physical experiments. To simulate the wave propagation accurately, several novel techniques are used to build the numerical model to a scale comparable to laboratory specimens and to effectively eliminate the near-field effect and boundary reflections. It is shown that, with the presence of fines, the degradation of elastic wave velocity is directly associated with the reduction of coordination number. The dispersion relationship constructed from the space-time data of all particles reveals that even a small quantity of fines can cause severe frequency filtering and attenuation. Tied up with recent experimental work, the unified method of characterising the shear wave velocity by the state parameter in the critical state theory is confirmed by the simulations of both small-strain wave propagation and large-strain triaxial compression tests. At the microscopic level, a sound relationship is found between the mechanical coordination number and the stress-normalised shear wave velocity.