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An efficient fast multipole method (FMM) formalism to model scattering from two-dimensional (2-D) microstrip structures is presented. The technique relies on a mixed potential integral equation (MPIE) formulation and a series expression for the Green functions, based on the use of perfectly matched layers (PML). In this way, a new FMM algorithm is developed to evaluate matrix-vector multiplications arising in the iterative solution of the scattering problem. Novel iteration schemes have been implemented and a computational complexity of order O(N) is achieved. The theory is validated by means of several illustrative, numerical examples. This paper aims at elucidating the PML-FMM-MPIE concept and can be seen as a first step toward a PML based multilevel fast multipole algorithm (MLFMA) for 3-D microstrip structures embedded in layered media.