Posttensioning has been used successfully to improve the performance of existing bridge structures. High-strength tendons can be used to effectively increase the ultimate capacity of composite beams. The main purpose of this paper is to develop a reliable three-dimensional (3D) finite-element (FE) model to simulate the nonlinear flexural behavior of steel-concrete composite beams strengthened with externally posttensioned tendons. A 3D FE model was used, where the nonlinear material behavior and geometrical analysis based on incremental-iterative load methods were adopted. The effective posttensioning stress was applied as initial strain in the link element used to model the tendons. To verify the accuracy of the developed 3D FE model, comparison between the FE analysis results and previous experimental results is presented. In-depth study has been carried out on the overall behavior of the strengthened beam and the effect of external posttensioning on stiffness, induced stresses, slippage between concrete slab and steel beam, and shear connector moments. The results of the FE model compared well with the experimental results and the FE analysis. Using external posttensioning tendons in the positive moment region for steel-concrete composite beams increased their ultimate capacity by 25%, the stiffness by 33%, and significantly improved the overall response of the bridge structural system.