Asphalt pavement often experiences structural failure due to repeated vehicle loading. The discrete element method (DEM) model was established based on the semicircle bending test (SCB) to investigate the fracture damage mechanism of emulsified asphalt cold recycled mixture (CRME) under loading. The micro-mechanical parameters of CRME were determined through a reliable validation process using the uniaxial compression static creep test. The microscopic fracture characteristics of CRME were investigated through the load-displacement curve, stress distribution, and force chain distribution. The fracture energy was used as the evaluation index to analyze the influence of prefabricated notch length and aggregate gradation on the fracture performance of CRME. The results indicate that the emulsified asphalt mortar-aggregate interface was the critical weak position of the mixture fracture; the failure of the tension chain was the main destructional form of the SCB test. The development of cracks affected the stress concentration phenomenon and stress concentration level of the mixture. Fine-grained mixture exhibited crack resistance. The number and length of cracks were affected by gradation. As the prefabricated notch length increased, the influence gradually diminished. The research results could provide theoretical and data support for the design of CRME.