Research applications involving design tool development for multiple phase material design are at an early stage of development. The computational requirements of advanced numerical tools for simulating material behavior such as the finite element method (FEM) and the molecular dynamics method (MD) can prohibit direct integration of these tools in a design optimization procedure where multiple iterations are required. The complexity of multiphase material behavior at multiple scales restricts the development of a comprehensive meta-model that can be used to replace the multiscale analysis. One, therefore, requires a design approach that can incorporate multiple simulations (multi-physics) of varying fidelity such as FEM and MD in an iterative model management framework that can significantly reduce design cycle times. In this research a material design tool based on a variable fidelity model management framework is presented. In the variable fidelity material design tool, complex “high fidelity” FEM analyses are performed only to guide the analytic “low-fidelity” model toward the optimal material design. The tool is applied to obtain the optimal distribution of a second phase, consisting of silicon carbide (SiC) fibers, in a silicon-nitride (Si3N4) matrix to obtain continuous fiber SiC-Si3N4 ceramic composites (CFCCs) with optimal fracture toughness. Using the variable fidelity material design tool in application to one test problem, a reduction in design cycle time around 80 percent is achieved as compared to using a conventional design optimization approach that exclusively calls the high fidelity FEM.