In this study, high-performance polyethylene (HPPE) fiber-based needle punched nonwovens were interleaved in cross-plied woven carbon fabric/epoxy composite laminates to enhance their interlaminar and impact properties. The placement of needle punched nonwoven interleaves exhibited considerable enhancement in interlaminar shear strength (ILSS), impact damage tolerance, and compression after impact (CAI) strength of laminates as evidenced by higher interlaminar strength, less absorbed energy, higher elastic energy, reduced damage degree, reduced out-of-plane deformation, higher loadbearing capacity, and higher residual compressive strength as compared to control sample. In particular, the composite laminate with placement of interleaves in alternating sequence between carbon plies resulted in 205.76% increase in ILSS and 129, 103 and 85% increase in CAI at 10, 25, and 40 J impact energy, respectively. Moreover, damaged surface area and out-of-plane deformation reduced to 38.75% and 62.5%, respectively for the same specimen impacted at 40 J energy. These results suggest that the HPPE fiber-based needle punched nonwoven interleaving can be adopted as a simple and low-cost approach compared with other interleaving techniques, to enhance the resistance to delamination, impact performance, and damage tolerance of traditional structural laminates.