Adhesive bonded composite joints with an embedded insert consisting of an interfacial hybrid thermoset–thermoplastic bondline could activate an extrinsic toughening mechanism that quadruples the mode I fracture toughness. However, the mechanisms of extrinsic toughening (anchoring, debonding, stretching, detachment), their associated energy dissipation, and the role of bondline parameters (wavelength, porosity, ductility) have not been detailed thus far. Here, we developed double cantilever beam (DCB) finite element models consisting of two rigid composite adherends and an elastoplastic bondline. We prescribed a spatially arranged interfacial/cohesive pattern to simulate the extrinsic toughening and evaluate the increase in fracture toughness. DCB tests were performed to validate the load–displacement curves, fracture toughness, and extrinsic toughening mechanisms obtained from the finite element models. The elastic–plastic energy dissipation during the crack-bridging process was also evaluated using the models. Despite the two-dimensional nature, the modeling results are in reasonable agreement with the experiments, providing an option for further developing a new heterogeneous bondline concept.