This paper discusses the long standing issue, which is the underlying mechanisms behind the change of mechanical properties of carbon/epoxy composites when through-thickness stitching is employed. In particular, the development of matrix microcracking and delamination in Vectran-stitched carbon/epoxy composites subjected to static and fatigue loads is discussed. Damage mechanisms in the order of occurrence, i.e. growth of microcracking and delamination, and the quantification of damage in stitched composite of different stitch density are given in details. It is found that while stitching may promote larger amount of microcracking in transverse (90°) and oblique directions (+45° and -45°), it is also effective in arresting the delamination growth. High-density stitch (11.1/cm2) in carbon/epoxy laminates is effective in arresting the delamination growth.