Abstract Laminated composite structures consisting of load-carrying and multifunctional materials represent a rather powerful material system. The passive, load-carrying layers can be made of isotropic material or fiber-reinforced composites, while piezoelectric materials represent the most common choice of multifunctional materials for active layers. The multifunctionality of piezoelectric layers is provided by their inherent property to couple mechanical and electric fields. The property can thus be used to sense deformations or produce actuating forces. A highly efficient 3-node shell element is developed for modeling piezoelectric laminated composite shells. The equivalent single-layer approach and Mindlin-Reissner kinematics are used in the element formulation together with the discrete shear gap (DSG) technique to resolve the shear locking and strain smoothing technique to improve the performance. Piezoelectric layers are assumed to be polarized in the thickness direction thus coupling the in-plane strains with the electric field oriented in the thickness direction. The co-rotational FE formulation is used to account for geometrically nonlinear effects. Numerical examples cover linear and geometrically nonlinear static and dynamic cases with piezoelectric layers used as actuators and sensors.