Interface debonding, which plays an important role in the deformation and fracture of composite materials, can be characterized by a cohesive law. We use a nonlinear cohesive law for the particle/matrix interface obtained from experiments to study the effect of interface debonding on the macroscopic behavior of composite materials. The dilute solution is obtained for a composite with spherical particles subject to interface debonding and remote hydrostatic tension. For a composite with a fixed particle volume fraction, particle and matrix properties, and interface cohesive law, different particle sizes may lead to very different macroscopic behaviors, such as hardening of the composite for small particles, softening for medium particles, and unloading for large particles. Two critical particle sizes separating these three scenarios are identified. The composite with particles of the same size as well as the bimodal distribution of particle size is studied, with a focus on the effects of particle size and cohesive energy of the particle/matrix interface. For medium or large particles, the particle/matrix interface may undergo catastrophic debonding, i.e., sudden, dynamic debonding, even under static load.