Macro-hybrid mixed variational models of two-phase flow, through fractured porous media, are analyzed at the mesoscopic and macroscopic levels. The mesoscopic models are treated in terms of nonoverlapping domain decompositions, in such a manner that the porous rock matrix system and the fracture network interact across rock-rock, rock-fracture, and fracture-fracture interfaces, with flux transmission conditions dualized. Alternatively, the models are scaled to a macroscopic level via an asymptotic process, where the width of the fractures tends to zero, and the fracture network turns out to be an interface system of one less spatial dimension, with variable high permeability. The two-phase flow is characterized by a fractional flow dual mixed variational model. Augmented two-field and three-field variational reformulations are presented for regularization, internal approximations, and macro-hybrid mixed finite element implementation. Also abstract proximal-point penalty-duality algorithms are derived and analyzed for parallel computing. Copyright (c) 2016 John Wiley & Sons, Ltd.