The free vibration and aeroelastic analysis of variable angle tow (VAT) laminated composite plate bonded with discrete piezoelectric patches are considered for investigation. A finite element (FE) model is developed using eight noded isoparametric elements to study the impact of delamination size and location on the dynamic response of smart VAT laminated plates. For aeroelastic analysis, the FE model is coupled with MSC. Nastran through Direct Matrix Abstraction Program (DMAP) and the structural parameters obtained with the FE model are supplied to MSC. Nastran solver to generate aerodynamic force matrix using Doublet Lattice Method (DLM). Various parametric studies are performed to find the most critical location of the delamination that severely affects vibration and flutter characteristics. The results showed that the delamination near the leading edge which faces free stream wind is found to be the most critical for the dynamic aeroelastic failure of structures. Further, the most effective location of the piezoelectric patches is identified to enhance the aeroelastic boundary of smart delaminated VAT composite plates using active displacement and velocity feedback gains.