The evolution of microstructural damage during tensile deformation of pure aluminium reinforced with 10 vol.% alumina short fibres is studied by monitoring the evolution of density and Young's modulus as a function of tensile strain. It is found that Young's modulus drops rapidly until a strain ε c ≈ 3%. The composite density remains virtually unchanged in this strain range. At strains above ε c , Young's modulus decreases more slowly while the density begins to decrease linearly, indicating void growth in the composite. It is shown that the drop in Young's modulus is linked to fragmentation of fibres aligned along the stress axis, while the decrease in density is related to void opening across fibre cracks.