An optical fiber embedded between layers of structural fibers in a composite deforms together with a composite structure and modulates light passing through the optical fiber. This effect has been implemented in the form of so-called "smart skins". By analyzing the changes of light transmitted by an embedded fiber dangerous strain levels in the structure as well as failure of the material can be detected. A system of such optical sensors embedded in a structure could act as the nervous system of this structure. Several important questions must be answered before the concept of embedding optical fibers in a composite structure can be commercialized. How does the presence of optical fibers in a composite affect its mechanical performance? How does an embedded fiber affect the strain distribution in its vicinity? What is the relationship between the strain distribution and the layup of the surrounding composite? What can be done to prevent the negative effects of the introduction of an extra fiber into a structure? This work addresses some of these questions. Preliminary results of experimental tests performed on representative composite specimens are presented. A discussion of the results and plans for the future are provided.