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In this paper, the influence of aggregate size and volume fraction on shrink-age induced micro-cracking and permeability of concrete and mortar was in-vestigated. Nonlinear finite element analyses of model concrete and mor-tar specimens were performed. The aggregate diameter was varied between2 and 16 mm. Furthermore, a range of volume fractions between 0.1 and 0.5was studied. The nonlinear analyses were based on a 2D lattice approachin which aggregates were simplified as monosized cylindrical inclusions. Theanalysis results were interpreted by means of crack width and change of perme-ability. The results show that increasing aggregate diameter (at equal volumefraction) and decreasing volume fraction (at equal aggregate diameter) greatlyincreases permeability.