A single-ply unidirectional IM7/8552 carbon fiber reinforced plastic composite with artificially introduced circular defects is subjected to dynamic tensile loading using a modified Kolsky tension bar. A high-speed X-ray phase contrast imaging method is integrated with the Kolsky bar setup to record the crack initiation from the defects and subsequent propagation in the material in real time during the tensile loading. The tensile loading was applied either in longitudinal (0° to fibers) or transverse (90° to fibers) direction of the specimens. Shear failure of the matrix and axial splitting along the loading/fiber direction were observed in longitudinal specimens to initiate from the edge of the artificial circular defects. Debonding of fiber and matrix was observed in transverse specimens, which initiated from the top and bottom edge of the hole. The dynamic tensile loading history during the crack propagation was recorded using a piezoelectric load cell and synchronized with the observed damage and failure processes.