Progress toward the development of a fiber optic damage assessment system for composite materials is reported. This system, which is based on the fracture of embedded optical fibers, has been characterized with respect to the orientation and location of the optical Fibers in the composite. Together with a special treatment, these parameters have been tailored to yield a system capable of detecting the threshold of damage for various impacted Kevlar/epoxy panels. The technique has been extended to measure the growth of a damage region which could arise either from impact, manufacturing flaws, or static overloading. The mechanism of optical fiber fracture has also been investigated. In addition, the influence of imbedded optical fibers on the tensile and compressive strength of the composite material has been studied. Image enhanced backlighting has been shown to be a powerful and convenient method of assessing internal damage to translucent composite materials.