The aim of this paper is to capture the grain boundary effects taking into consideration the nonlinear dissipative effects of ferroelectric polycrystals based on firm thermodynamic principles. The developed micromechanically motivated model is embedded into an electromechanically coupled finite element formulation in which each grain is represented by a single finite element. Initial dipole directions are assumed to be randomly oriented to mimic the virgin state of the unpoled ferroelectric polycrystal. An energy-based criterion using Gibbs free energy is adopted for the initiation of the domain switching process. The key aspect of the proposed model is the incorporation of effects of the constraint imposed by the surrounding grains on a switching grain. This is accomplished by the inclusion of an additional term in the domain switching criterion that is related to the gradient of the driving forces at the boundary of the grains. To study the overall bulk ceramics behavior, a simple volume-averaging technique is adopted. It turns out that the simulations based on the developed finite element formulation with grain boundary effects are consistent with the experimental data reported in the literature. © 2010 IOP Publishing Ltd.