The current work presents the multilevel approach of the embedded finite element method which is obtained by combining features of the method of domain decomposition with those of the standard embedded finite element method. The conventional requirement of fine mesh in a possible failure zone is rendered unnecessary with the new approach thereby reducing the computational expense. In addition, it is also possible to stop a propagating crack-tip in the middle of a finite element. In this approach, the finite elements at the failure-prone zone where cracks or shear bands, referred to as strong discontinuities which represent jumps in the displacement field, can form and propagate based on some failure criterion are treated as separate sub-boundary value problems which are adaptively discretized during the run time into a number of sub-elements and subjected to a kinematic constraint on their boundary. Each sub-element becomes equally capable of developing a strong discontinuity depending upon its state of stress. A linear displacement based constraint is applied initially which is modified accordingly as soon as a strong discontinuity propagates through the boundary of the main finite element. At the local equilibrium, the coupling between the quantities at two different levels of discretization is obtained by matching the virtual energies due to admissible variations of the main finite element and its constituent sub-elements. (© 2012 Wiley-VCH Verlag GmbH & Co. KGaA, Weinheim)