The microcrack distribution and mass change in T700s/PR520 and T700s/3502 carbon/epoxy braided composites exposed to thermal cycling was evaluated experimentally. Acoustic emission was utilized to record the crack initiation and propagation under cyclic thermal loading between −55 °C and 120 °C. Transverse microcrack morphology was investigated using X-ray computed tomography. The differing performance of two kinds of composites was discovered and analyzed. Based on the observations of microcrack formation, a meso-mechanical finite element model was developed to obtain the resultant mechanical properties. The simulation results exhibited a decrease in strength and stiffness with increasing crack density. Strength and stiffness reduction versus crack densities in different orientations were compared. The changes of global mechanical behavior in both axial and transverse loading conditions were studied. By accounting for the obtained reduction of mechanical properties, a macro-mechanical finite element model was utilized to investigate the influence of microcracking on the high-speed impact behavior.