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 shear-lag 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 the coating of optical fiber was also investigated. Specimens were made with transparent glass/epoxy prepreg because the transverse crack and other damages such as delamination, 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 cracks of specimens with embedded optical fibers which were initiated at a slightly lower stress level showed smaller spacing at the same stress level than those of specimens without embedded optical fibers. The theoretical crack spacing evaluated from the shear lag analysis showed good agreements with experimental results.