Under service loads or during fabrication and processing, certain fibrous composite plies may experience extensive decohesion, such as debonding and sliding at fiber-matrix interfaces. The effect of some of these damage processes on overall stiffness and on internal stress redistribution is analyzed here with the Transformation Field Analysis method (Dvorak and Benveniste, 1992, Proc. R. Soc., London, Vol. A437, p. 291), which simulates creation of new internal surfaces by equivalent eigenstrains applied to an undamaged elastic system. Simple expressions for change in potential energy of the damaged ply are also obtained using the Colonetti’s theorem. The analytical results are shown to be in good agreement with selected finite element solutions for unit cells. Applications indicate that the energy released by fiber debonding depends linearly on fiber radius.