The ongoing fourth industrial revolution, also known as “Industry 4.0” is the driving force behind the digitalization of various manufacturing systems by incorporating smart autonomous systems, the Internet of Things (IoT), robotics, and artificial intelligence. In terms of aerospace composites, comprehensive research has been carried out in the past decade or so to manufacture smart and self‐sensing fiber‐reinforced polymer composites capable of monitoring their own health states. This review focuses on recent developments in smart, self‐sensing fiber‐reinforced composites incorporating nanomaterial‐coated piezoresistive fabric sensors such as carbon nanotubes (CNTs), graphene, and MXene. A comprehensive overview of process monitoring involving the complete resin infusion cycle, such as compaction response, resin flow monitoring, pressure variations within the mold, process‐induced defects monitoring, and cure/post‐cure monitoring, has been provided. The post‐manufacturing structuring health monitoring (SHM) of composites has also been discussed in detail. An overview of the associated challenges of these sensors, such as manufacturability, robustness, conductivity/piezoresistivity calibration, and the effect on structural integrity, is presented. Finally, future insights into the application of these sensors in the physical and cyber domains for smart factories of the future have also been discussed.