Fiber Reinforced Plastic (FRP) composite materials are widely used in many applications especially in aircraft manufacturing because they offer outstanding strength to weight ratio compared to other materials such as aluminum alloys. The use of hybrid composite materials is potentially an effective cost saving design while maintaining strength and stiffness requirements. In this work, Woven Carbon Fibers (WCFs) along with Unidirectional Glass Fibers (UDGFs) are added to a an aerospace-rated epoxy matrix system to produce a hybrid carbon and glass fibers reinforced plastic composite plates. The manufacturing method used here is a conventional vacuum bagging technique and the stacking sequence achieved consists of a symmetric and balanced laminate (±451WCF, 03UDGF, ±451WCF) to simulate the layup usually adopted for helicopter composite blades constructions. Then, tensile static tests samples are cut according to ASTM standard using a diamond blade and tested using a servohydraulic test machine. Acoustic Emission (AE) piezoelectric sensors (transducers) are attached to the samples surface using a special adhesive. Stress waves that are released at the moments of various failure modes are then recorded by the transducers in the form of AE hits and events (a burst of hits) after they pass through pre-amplifiers. Tests are incrementally paused at load levels that represent significant AE hits activity which usually corresponds to certain failure modes. The unbroken samples are then thoroughly investigated using a high resolution microscopy. The multi load level test-and-inspect method combined with AE and microscopy techniques is considered here to be an innovation in the area of composite failure analysis and damage characterization as it has not been carried out before. Results are found to show good correlation between AE hits concentration zones and the specimens damage location observed by microscopy. Waveform analysis is also carried out to classify the damage type based on the AE signal strength energy, frequency and amplitude. Most of the AE activity is found to initiate from early matrix cracking that develops into delamination. Whereas little fiber failure activity has been observed at the initial stages of the load curve. The results of this work are expected to clear the conflicting reports reported in the literature regarding the correlation of AE hits characteristics (e.g. amplitude level) with damage type in FRP composite materials. In addition, the use of a hybrid design is qualitatively assessed here using AE and microscopy techniques for potential cost savings purposes without jeopardizing the weight and strength requirements as is the case in a typical aircraft composite structural design.