This work is concerned with extracting characteristic features of transverse crack formation in cross ply laminates under axial tension considering nonuniform distribution of fibers in the ply cross section. The fiber-matrix debond crack initiation sites are determined first by the dilatation induced cavitation criterion for an epoxy matrix. The growth of the debond cracks is analyzed by calculating the energy release rates using the virtual crack closure technique. The kink-out of the debond cracks into the matrix is determined in short incremental steps by the maximum energy release rate criterion. Different scenarios are considered for the linking up of the kinked-out cracks to form continuous transverse cracks. By studying two different degrees of fiber distribution nonuniformity, the interactive effects due to the fiber distribution on the transverse crack formation are clarified.