Abstract: The dispersion fuel is with the advantages of high burnup, strong ability of containing fission products and good thermal conductivity. It is widely used as an advanced fuel element in new types of nuclear reactors. However, the dispersion fuel element in which the fuel particles statistically distributed in the matrix material presents some new challenges for the conventional neutron transport simulation methods. In this paper, the Monte Carlo neutron transport simulation method based on the chord length sampling is developed. The method can realize the on-the-fly modeling of the dispersion fuel, in which the fuel particles are randomly distributed in the matrix material. The method can obtain neutron transport simulation results accurately and effectively. The method was verified with numerical benchmarks, which indicated the accuracy and reliability of the method in dealing with the dispersion fuels in criticality calculations.