Advanced composites are widely used in primary and secondary structural applications, for example, aerospace, automotive, marine, and renewable energy sectors. But it is well recognized that the impact resistance and damage tolerance of composite laminates are in general poor, which is a major challenge for optimizing structural designs. In this regard, an experimental study is conducted for enhancing the damage tolerance of 2D woven composite laminates by exploring yarn‐level fiber hybridization. Hybrid yarns are produced by combing high‐strength fibers, that is, S‐glass, and high‐toughness fibers, that is, polypropylene [PP], and using commingling and core‐wrapping processes. Using the hybrid yarns, 2D fabrics, that is, with 5H satin, 2/2 twill, and 2/2 basket architectures, are weaved, and subsequently hybrid S‐glass/PP/epoxy laminates are manufactured via vacuum assisted resin infusion. The low velocity impact response and energy absorption of the hybrid laminates are investigated by drop‐weight impact tests at different energy levels, that is, 15 J, 25 J, 35 J, and 50 J. The damage tolerance is studied by compression‐after‐impact (CAI) tests, measuring the residual compressive strength of the damaged laminates. Furthermore, the failure modes are investigated using scanning electron microscopy for identifying damage mechanisms in the hybrid laminates after the impact and CAI tests. The impact response and damage tolerance of the 5H satin, 2/2 twill, and 2/2 basket fabric laminates are compared with that of noncrimp‐fabric laminates produced with (ie, S‐glass/PP yarns) and without (ie, S‐glass yarns) yarn‐level hybridization. It is shown that yarn‐level hybridization and fiber architecture significantly affect the impact behavior and damage tolerance of the 2D woven S‐glass/PP/epoxy hybrid laminates investigated. The microscopy studies show that intra‐yarn, inter‐yarn, inter‐lamina failure mechanisms can in general be introduced by combining yarn‐level fiber hybridization and fiber architecture for modifying failure and energy dissipation mechanisms under low velocity impact and hence the damage tolerance of composite laminates.