SUMMARYThis paper discusses higher‐order extended finite element methods (XFEMs) obtained from the combination of the standard XFEM with higher‐order FEMs. Here, the focus is on the embedding of the latter into the partition of unity method, which is the basis of the XFEM. A priori error estimates are discussed, and numerical verification is given for three benchmark problems. Moreover, methodological aspects, which are necessary for hp‐adaptivity in XFEM and allow for exponential convergence rates, are summarized. In particular, the handling of hanging nodes via constrained approximation and an hp‐adaptive strategy are presented. Copyright © 2011 John Wiley & Sons, Ltd.