A Raman spectroscopic technique was used to investigate the elastic modulus degradation and the residual strain development in cross-ply and [0/452/0]T glass fibre/epoxy laminates. Glass has a poor Raman signal and, therefore, embedded aramid fibres were used as strain sensors for mapping of the internal strain development within the 0° ply due to matrix cracking in the off-axis ply. The elastic modulus and the residual strain were derived from the changes of the distance between well identified strain "peaks" on the aramid fibres. The elastic modulus reduction and the residual strain development are described by a closed form model. The modulus reduction predictions are accurate, whereas the experimental residual strain is higher than that predicted. Since both phenomena are governed by the same elastic parameters, the discrepancy cannot be explained by purely elastic analysis. Development of inelastic strains in the off-axis layer is suggested as a possible cause