Classical elastoplastic theory predicts that the rotation angle near an interface between two mismatched materials is discontinuous under shear. The strain gradient effects, however, can be significant within a narrow region near the interface. This can be shown by application of the strain gradient plasticity. The matching expansion method was used to obtain asymptotic results. Comparison is then made with those found numerically for the interface torsion problem of a two-layered cylindrical tube. The strain gradient plasticity theory solution differs from that of the classical elas-toplastic theory solution, depending on the properties aside from the interface behavior and the loading mode. A failure criterion is also proposed that accounts for the strain gradients.