Active fiber composite (AFC) composed of lead zirconate titanate (PZT) fibers with interdigitated electrodes (IDEs) has been integrated into orthotropic glass fiber reinforced plastic (GFRP) laminates to characterize the performance of AFC as a smart material component in laminated materials. Monotonic cyclic tensile loading was performed on integrated specimens at different strain levels. The AFC output was monitored to determine the effect of applied strain level on the AFC performance. It was found that the AFC sensitivity degraded beyond strains of 0.20% and approached a minimum at 0.50% strain. The degradation in the AFC performance appears to be attributed to the dominating effect of PZT fiber fragmentation during testing, as opposed to depolarization. Acoustic emission (AE) monitoring was used to detect damage in laminates during testing and was correlated with crack evidence from microscopy observations during testing to characterize damage evolution in response to strain levels.