A test program was conducted to compare the tensile behavior of laminates made with graphite fibers and a low strain-to-failure matrix system (epoxy) versus a high strain-to-failure matrix system (PEEK), in the presence of notches. Graphite/epoxy (AS4/3501-6) and graphite/PEEK (AS4/APC-2) laminates were utilized in three different layups: [(±45)2/0/90]s, [45/02/-45/02/90]s, and [±45/0]s. These laminates represent “soft,” “stiff,” and “medium” configurations, respectively, in regard to their longitudinal stiffness as manifested by the percentage of 0° plies in each. Two different hole configurations, open and filled, were utilized with three different hole diameters: 6.35, 9.53, and 12.7 mm. All specimens were tested to failure in tension with X-ray photographs taken at various loading intervals with the aid of a dye penetrant. Semi-empirical relations were successfully used to correlate the data for both material systems. The graphite/epoxy system showed earlier and more extensive matrix damage than the graphite/PEEK system. In the case of the “soft” [( ± 45)2/0/90]s laminate, this led to a lower failure stress for the graphite/epoxy laminate as compared to the graphite/PEEK laminate; whereas, this led to a higher failure stress for the “stiff” [45/02/-45/02/90]s graphite/epoxy laminate. This is related to the number of major load-carrying plies (0°) in the laminate and the load redistribution caused by the damage. These results indicate that the in-plane “toughness” of a composite laminate is a structural property and cannot be directly correlated to the “toughness” or strain to failure of the matrix system but must account for the damage progression which occurs in the specific laminate configuration.