Composite materials can sustain a much higher load in inplane tension after the onset of local damage. The ultimate strength of composite laminates can be accurately predicted with finite element analysis if the proper increment is used in each step. An analysis of the appropriate nodal spacing both in the plane of the specimen and in the thickness direction has been made with particular attention to the problem of stress concentration at the free edges. The load for final catastrophic failure and the failure pattern in progressive failure both agree well with experimental results.