This paper proposes a multi-scale analysis technique based on the micromechanics of failure (MMF) to predict and investigate the damage progression and ultimate strength at failure of laminated composites. A lamina’s representative volume element (RVE) is developed to predict and calculate constituent stresses. Damages that occurred in the constituents are calculated using separate failure criteria for both fiber and matrix. Subsequently, the volume-based damage homogenization technique is utilized to prevent the localization of damage throughout the total matrix zone. The proposed multiscale analysis procedure is then used to investigate the notched and unnotched behavior of three multi-directional composite layups, [30, 60, 90, −60, 30]2S, [0, 45, 90, −45]2S, and [60, 0, −60]3S, subjected to static tension and compression loading. The specimen is fabricated from unidirectionally reinforced composite (IM7/977-3). The prediction of ultimate strength at failure and equivalent stiffness are then benchmarked against the experimental test data. The comparative analysis with various failure models is also carried out to validate the proposed model. MMF demonstrated the capability to correctly predict the ultimate strength at failure for a range of multidirectional composites laminates under tensile and compressive load. The numerically predicted findings revealed a good agreement with the experimental test data. Out of the three investigated composite layups, the simulated results for the quasi-isotropic [0, 45, 90, −45]2S layup agreed extremely well with the experimental results with all the percentage errors within 10% of the measured failure loads.