An experimental investigation was conducted to study the failure strength and damage mechanism of notched composite laminates under a biaxial compression loading condition. Square specimens (125 mm) were made from G-10 orthotropic woven composite laminates by drilling a 20-mm-diameter center hole. Under biaxial compression loading, one or two fractures nucleated from the edge of the hole perpendicular to one of the two compression loading directions depending on the biaxial load ratio. Fracture surfaces of failed specimens were observed in an SEM, and kinking bands at the notch root were found to control the failure of specimens under both uniaxial and biaxial compression loading conditions. Remote failure stress and strain of notched specimens under uniaxial compression are about 50% of the failure stress and strain obtained from unnotched specimens in the same direction. Stress and strain at the notch root were obtained by an FEM calculation and strain gage measurements. The average stress and strain at the notch root over a characteristic length of 5 mm were found to control the formation of kinking bands and failure strength. A concentration factor based on the average stress criterion is introduced and used successfully to correlate the failure strength of notched woven laminates under biaxial loading conditions.