This paper presents an actual microstructure-based numerical method to investigate the mechanical properties of concrete at mesoscopic level. Digital image processing technique is used to capture the concrete surface image and generate the actual 3-phase microstructure of the concrete, which consists of aggregate, matrix and interfacial transition zones. The microstructure so generated is then transformed into a mesh or grid for numerical analysis. A finite difference code FLAC2D is used for the numerical analysis to simulate the mechanical responses and failure patterns of the concrete. Several cases of concrete with different degrees of material heterogeneity and under different compression loading conditions have been analysed. From the numerical results, the effects of the internal material heterogeneities as well as the external confining stresses are studied. It is shown that the material heterogeneities arising from the presence of different phases and the existence of interfacial transition zones have great influence on the overall mechanical behaviour of concrete and that the numerically simulated behaviour of concrete with or without confining stresses applied agrees quite well with the general observations reported in the literature.