This research work focuses on the development of a piezoelectric magnetostrictive smart composite with advanced sensing capability. The composite piezoelectric property is achieved from the dispersion of single-walled carbon nanotubes (SWCNTs) and the magnetostrictive property from Terfenol-D nanoparticles. Finite element analysis (FEA) is used to examine the feasibility of modelling the piezoelectric (change in electric field) and magnetostrictive (change in magnetic field) self-sensing responses in the presence of applied stress. The numerical work was coupled with a series of mechanical tests to characterize the piezoelectric response, magnetostriction response and mechanical strength. Tensile tests of the composite samples manufactured as is (virgin), samples with SWCNTs, samples with Terfenol-D nanoparticles and samples with both SWCNTs and Terfenol-D nanoparticles were conducted. It was observed that an increase in volume fraction of Terfenol-d nanoparticles increases the change in magnetization, therefore increasing voltage response up to the point of saturation. The optimum change in amplitude was observed with 0.35% volume fraction of Terfenol-D nanoparticles. A constant ratio of SWCNTs was maintained, and maximum change in electrical resistance was at 7.4%. Fracture toughness for the samples with all nanoparticles was explored, and the results showed improved resistance to crack propagation.