Damage assessment of composite blades is investigated for hydrokinetic turbine applications in which lowvelocity impact damage is possible. The blades are carbon/epoxy laminates that are made using an out-of-autoclave process and the blade design is a hydrofoil with constant cross-section. Both undamaged and damaged blades are manufactured and instrumented with strain sensors. Water tunnel testing is conducted with varying flow velocities and for different blade angles. A theoretical simulation is included that is based on finite-element method. The influence of damage on the response characteristics is discussed as an indicator of structural health.