A requirement for online monitoring has emerged owing to the susceptibility of fibre reinforced composite materials to sub-surface damage. Acoustic emission (AE) monitoring is understood to detect damage well before catastrophic failure; research in AE sensing therefore continues to attract significant attention. The research presented herein provides a review of a fibre-optic-based AE sensor design. Developmental work was performed to evaluate both sensor fabrication and packaging-related issues. The characteristics of the sensor were found to be influenced by: (i) the type of optical fibre used for fabrication; and (ii) preparation of optical fibres prior to sensor fabrication. The use of a small-diameter packaging substrate revealed improvements in sensor performance. The fibre-optic AE sensor was successfully embedded in a uni-directional composite laminate that was fabricated using autoclave processing. The embedded fibre-optic sensor was found to provide higher sensitivity to simulated AE compared with a surface-mounted sensor. Sensor characterisation trials were performed using simulated AE; a low directional sensitivity was observed. Modal analysis revealed a preferential sensitivity to the A0 wavemode; this sensor design may therefore be suited to the detection of delamination in FRCs. Finally, the sensor was shown to successfully detect interlaminar crack propagation under Mode-I loading.