Monitoring of thermoplastic carbon reinforced composites is critical for the safe operation and optimization of composite structures. Strain measurement during their manufacturing and operation is often achieved with embedded Fiber Bragg Gratings (FBG). However, conventional FBGs can only measure axial strain. To measure multiaxial strain in thermoplastic composites, FBGs inscribed in highly-birefringent side-hole elliptical core optical fiber (SH2 FBG) are proposed. SH2 FBG were used to monitor composite produced by automated tape laying process, first − to measure residual in-plane and out-of-plane strain during the manufacturing stage, second − in plane transverse strain during cyclic loading. It was demonstrated that the sensors can be used to measure multiaxial residual strain, observe changes in material stiffness, and calculate the area of the mechanical hysteresis loop. As a result − it was shown that embedding SH2 FBG can be an effective and robust method for monitoring the carbon fiber reinforced thermoplastic composite.