The microstructure has a significant influence on the fracture behaviour of magnesia refractories. Compared to magnesia materials, the magnesia spinel materials exhibit a higher amount of microcracks, causing a larger fracture process zone (FPZ). The formation of the FPZ of industrially produced magnesia spinel and magnesia refractories was analysed using digital image correlation (DIC). A critical displacement, where the cohesive stress between the crack faces decreases to zero, is determined by analysing the development of the localized zone. Critical displacement determined from the changes of the FPZ width and length is used to determine the onset of macro-cracking and locate the crack tip. The FPZ for magnesia spinel material initiates before reaching the maximum load, and the onset of the traction free macro-crack is in the post-peak region. The FPZ size increases until the formation of a macro-crack takes place, but decreases afterwards. For the magnesia refractory, no pronounced FPZ could be detected. Due to the development of FPZ in magnesia spinel material, it exhibits a reduced brittleness. Refractories with reduced brittleness show a pronounced deviation from linear elastic behaviour and an enhanced thermal shock resistance. The wedge splitting test (WST), which enables stable crack propagation for quasi-brittle materials, was used to identify the fracture behaviour and the energy dissipation. The crack length is determined by analysing localized strain evaluated by the digital image correlation. The relation between the dissipated energy and the crack length was used to characterize the crack growth resistance. Refractory materials showing reduced brittleness consume a small amount of energy for fracture initiation but a large amount of energy for further crack propagation. Magnesia spinel material shows higher crack propagation resistance than magnesia material. The microcrack network that develops during the cooling stage of magnesia spinel refractories production process contributes to its heterogeneity. To simulate the fracture process of a magnesia spinel refractory subjected to a wedge splitting test, a heterogeneous continuum model with random distribution of the properties was developed. The tortuous crack path and fracture process development were investigated numerically and compared to experimental digital image correlation observations. Bilinear strain softening curves were used to depict the fracture behaviour of the refractories. With an inverse identification approach, the fracture parameters including tensile strength, ultimate displacement, and total specific fracture energy were obtained. The method may be the basis for a realistic simulation of crack propagation in refractories used for industrial applications.