This work aims to investigate the mechanical properties and crack propagation of cement paste at the micro-level. For this purpose, the peridynamic (PD) method is utilized for the first time to solve the problems of discontinuity in the microstructure of cement paste, such as initiation and propagation of cracks. The effects of various factors on the mechanical properties and microcracks propagation of hydrated cement paste at the micro-scale are investigated using the PD method and computer simulated microstructures, including loading direction, curing age and w/c ratio. The results show that with increasing strain, microcracks mainly form and develop through the outer hydration products, which are the weakest link in the connected solid skeleton of the microstructure; the size and number of microcracks increase during a process of stretching which may result in the decrease of the Young's modulus of hydrated cement paste; microscopically, hydrated cement paste can be considered as an isotropic material; furthermore, lower w/c ratio and longer curing age (or higher degree of hydration) would result in a harder cement paste, a higher tensile strength, and less microcracks. The simulated tensile strength and Young's modulus agree well with previous simulations and experimental results, proving the feasibility of the PD method in microscale studies of cement paste.