This paper is concerned with the development of a failure initiation and progressive failure analysis (PFA) method for advanced composite structures. The present PFA model is capable of predicting interactive out-of-plane and in-plane failure modes observed in fiber reinforced composite laminates including interlaminar behavior and matrix microdamage at the mesoscale. A probability analysis tool is coupled with the PFA to account for uncertainty in modelling parameters caused by material variability and manufacturing inconsistencies. The progressive damage response of a laminated composite panel with an initial delamination is studied and used to demonstrate the PFA modelling framework that is presented here.