In this study the effect of the presence of embedded optical fiber sensors on the transverse cracking of cross-ply laminates was investigated. The transverse crack spacing of cross-ply laminates with embedded optical fiber sensors was predicted using modified shearlag analysis considering the presence of optical fibers and compared with experimental results. The effect of the orientation and quantity of optical fibers was evaluated and the effect of coating of optical fiber was also investigated. Specimens were made with transparent Glass/Epoxy prepreg because the transverse crack and other damages such as delimitation, splitting and bleeding of laser can be examined directly and visually. It has been found that the transverse crack spacing was not affected significantly by the embedding of optical fibers at low volume fraction of optical fibers. However, the following trend was found that specimens with embedded optical fibers showed earlier crack initiation and smaller crack spacing than specimens without embedded optical fibers. The theoretical crack spacing evaluated from the shear lag analysis showed good agreements with experimental results.