This article presents results from experimental and computational investigations of composite laminates with embedded ply waviness defects of different geometries under compression. The effect of the ply waviness defect on the initiation, interaction, and evolution of failure mechanisms of surrounding plies are studied. Using high-resolution imaging and digital correlation analysis, the strain localization phenomenon is monitored, and the sequence of failure mechanisms is established. The experimental observations are supported with computational finite element progressive failure analyses of the same composites with ply waviness defects using an energy based continuum damage mechanics approach. For the case of laminates with ply waviness defects of high angles, a delamination crack between the wavy plies and adjacent transverse plies is the dominant mode of failure, which interacts strongly with the fiber compression and matrix tension modes. For the case of laminates with ply waviness defects of low angles, failure does not initiate at the waviness defect but at locations where the laminate strength was locally reduced due to other microstructural defects. The combined experimental and computational analyses presented here advanced the understanding of the interaction of compression failure mechanisms in composites with ply waviness defects, which is highly challenging to experimentally measure.