To identify the key factors influencing the cracking behavior of fully ceramic microencapsulated (FCM) fuel, this study employed the MOOSE multi-physics coupling platform and the cohesive phase-field fracture theory to simulate crack initiation and propagation in FCM fuel, with particular attention to the effects of particle spacing and residual pore in the matrix. Results showed that during early irradiation stages, in the absence of matrix defects, particle spacing had minimal influence on the distribution of the maximum principal stress. However, when residual pore was present in the SiC matrix, significant stress concentration occurred at the porosity sites, where the maximum principal stress was localized. Smaller particle spacing promoted crack initiation in the SiC matrix between adjacent particles and led to a higher number of cracks under the same fast neutron fluence. In the presence of residual pore, crack nucleation occurred at porosity sites even at low neutron fluence; at a fluence of 2.3 dpa, through-thickness cracks formed in FCM fuel containing residual pore, resulting in the loss of fission product containment capability.