In recent years there has been significant interest in titanium-based metal-matrix composites for structural applications in airframe and engine components. In many applications, these composites are integrated into structural components by diffusion bonding. Thus the composites are subjected to temperature/time cycles during material processing and to temperature/stress cycles in service. One major effect of these thermomechanical cycles is that they significantly alter the microstructure of the composite constituents and the residual stresses. Even though the changes in microstructure and residual stresses may not affect the composite properties greatly, they often lead to completely different failure mechanisms. Therefore, it is important to understand the role of heat treatment on composite damage development, which can only be done by nondestructively monitoring damage initiation and development during the failure process.