This research investigates the mechanical behavior and damage evolution in cross-ply basalt fiber composites subjected to different loading modes. A modified Arcan rig for simultaneous acoustic emission (AE) monitoring was designed and manufactured to apply quasi-isotropic shear, combined tensile and shear loading, and pure tensile loading on specimens with a central notch. Digital image correlation (DIC) was applied for high-resolution strain measurements. The measured failure strengths of the bio-composite specimens under different loading angles are presented. The different competing failure mechanisms that contribute to the local reduction in stress concentration are described. Different damage mechanisms trigger elastic waves in the composite, with distinct AE signatures that closely follow the sequence of fracture mechanisms. AE monitoring is employed to capture signals associated with structural damage initiation and progression. The characteristic parameters of AE signals are correlated with crack modes and damage mechanisms. The evolution of AE parameters during the peak load transition is presented, which enables the timely AE detection of the maximum load transition. The combination of DIC and AE monitoring improves understanding of the mechanical response and failure mechanisms in cross-ply basalt fiber composites, offering valuable insights for possible performance monitoring and structural reliability in diverse engineering applications.