Cross-ply composite laminates can develop very high density of transverse cracks in the 90-layer under severe thermal and mechanical loading conditions. At such high crack densities, two adjacent cracks start to interact, and a stress gradient is created in the region between these cracks. Due to the presence of high stress gradients, thickness averaging of longitudinal stress becomes obsolete. Thus, a detailed analysis of stress state along the thickness direction becomes necessary to study growth conditions of fiber sized microcracks initiated at the interface between 0-layer and 90-layer. Stress analysis at various crack densities is carried out in this project using finite element analysis or FEM as the main tool. This analysis is coupled with strain energy release rate (ERR) studies for a microcrack which grows in transverse direction from one interface to the other. The growth of this microcrack is found to be strongly influenced by the stress gradients and a presence of compressive stresses along midplane under tensile loading conditions at high crack densities.