This paper determines the performance of Fibre Bragg Grating (FBG) sensors for strain sensing applications in carbon fibre composite materials. Carbon fibre laminates in either cross-plied or quasiisotropic stacking sequences were fabricated using T300/Hexcel 914 prepregs. The FBG optical sensors were either surface attached, or embedded within laminates. The sensor orientation was aligned either parallel or transverse to the adjacent carbon fibre layers. The composite structures with integrated FBG sensors were subjected to static tensile loading. A scanning fibre Fabry-Perot filter was used to monitor the reflected Bragg wavelengths. The optical sensor embedded between two 90° carbon fibre plies shows a high sensitivity to multi-site cracking formed in the transverse plies. The embedding in 90° plies seems to change the local stress distributions and to become a source of crack initiation. Efficient stress transfer from the host materials to the sensors is dependent upon incorporation methods, the thickness of the adhesive layers, and the location of the sensors.