Underfill is usually modeled as an isotropic medium containing uniformly distributed filler particles. However, filler particles tend to settle (or segregate) and thus alter the mechanical response of the flip chip die attachment package. The integrity of such flip chip attachment is different from that with an ideal, isotropic underfill with very uniform distribution of filler. We analyzed the thermomechanical implications of filler settling to the stresses along the die/underfill interface by considering different profiles for the local concentration of filler and calculating their effective material properties by employing the Mori–Tanaka method. As the worst-case scenario, direct silicon die attach with solder bumps was assumed to analyze the interfacial stresses, which were predicted in trend by a simplified multilayered stack model and calculated in detail by finite element simulation. The filler settling has a localized but strong influence on the interfacial peeling stress near the edge of the die. The extent of this influence is determined by the profile of filler settling: (1) if the filler is assumed to settle in the form of a bilayer, then the peeling stress near the die’s edge increases and it is directly proportional to the average volume fraction of the filler; (2) if the filler is assumed to settle gradually, then the magnitude of the peeling stress near the edge of the die becomes smaller as the local filler volume fraction near the die interface increases. The filler settling has no significant effect on the other components of the interfacial stresses. The edge fillet of underfill in pure resin can locally reverse the direction of the interfacial peeling stress and increase the interfacial shearing stress near the die’s edge.