This study is concerned with the development and implementation of a new fi
nite element which is capable of treating the problem of interacting circul
ar inhomogeneities in heterogeneous solids under mechanical:and thermal loa
dings. The general form of the element,which is constructed from a cell con
taining a single circular inhomogeneity in a surrounding matrix, is derived
explicitly using the complex potentials of Muskhelishvili and the Laurent
series expansion method. The newly proposed eight-noded plane element can b
e used to treat quite readily the two-dimensional steady-state heat conduct
ion and thermoelastic problems of an elastic circular inclusion embedded in
an elastic matrix with different thermomechanical properties. Moreover, th
e devised element may be applied to deal with arbitrarily and periodically
located multiple inhomogeneities under general mechanical and thermal loadi
ng conditions using a very limited number of elements. The current element
also enables the determination of the local and effective thermoelastic pro
perties of composite materials with relative ease. Three numerical examples
are given to demonstrate its versatility, accuracy and efficiency. Copyrig
ht (C) 1999 John Wiley & Sons. Ltd.