Recent experimental studies report that the understanding of dielectrophoretic (DEP) interactions and chaining of irregularly shaped particles, particularly ellipsoidal shaped particle, are critical for development of smart materials, engineered biological cellular structure and tissue formation. This paper presents a comprehensive numerical investigation of direct current (DC) dielectrophoretic (DEP) chaining and interactions of ellipsoidal particles in a microchannel. A hybrid immersed boundary-immersed interface method is employed to explain the fundamental mechanism of DEP interactions and chaining of ellipsoidal particles. Electric field equations are solved by the immersed interface method while the immersed boundary method is employed to solve fluid equations. The DEP force was estimated by using Maxwell’s stress tensor (MST) and the Cauchy stress tensor (CST) was employed to evaluate hydrodynamic force. The results show that the electrical properties of fluid and particles are the main deciding factor on the final orientation of ellipsoidal particles. However the size, shapes and initial positions and orientations have significant impact on interaction time spans. Results also show that if the interacting particles are electrically similar i.e. having same electrical conductivity then they always form a chain parallel to the applied electric field, otherwise they form a chain which is orthogonal to the applied electric field. In parallel chaining, particles rotate in a clockwise direction, while in orthogonal (to the applied electric field) chaining, particles rotate in counter-clockwise direction to reach to the final orientation. Results also indicate that the ellipsoidal particles go through an electro-orientation process if initially the major axis of the ellipsoidal particles is not in perfect alignment with the applied electric field. The electro-orientation and DEP interaction take place simultaneously to reach to final stable orientation. This study provides critical insight on the mechanism of DEP interactions and chaining of ellipsoidal shaped particles.