This paper investigates impact response of a novel fibre metal laminate (FML) system based on a carbon fibre reinforced Aluminium Laminates (CARAL). These composites are fabricated using hand lay-up technique and the detailed preparation methodology was presented. Epoxy resin along with TETA hardener was used as the excellent adhesion agent throughout the layer. Three types of layers were prepared from CARAL and machined as per ASTM Standard. Low velocity impact response and damage characteristics of CARAL specimens were studied. Damage characteristics were evaluated using drop weight impact tester. Impact properties of CARAL were increased with the increase in number of layers of CARAL laminates. Finally cross- sectional morphology analysis was done using scanning electron microscope (SEM) and the internal structure of the broken specimen was discussed.