The concept of the directional pair distribution function is proposed to describe line broadening effects in powder patterns calculated from atomistic models of nano-polycrystalline microstructures. The approach provides at the same time a description of the size effect for domains of any shape and a detailed explanation of the strain effect caused by the local atomic displacement. The latter is discussed in terms of different strain types, also accounting for strain field anisotropy and grain boundary effects. The results can in addition be directly read in terms of traditional line profile analysis, such as that based on the Warren–Averbach method.