This paper will investigate wavelet packet transform of acoustic emission (AE) signal processing in order to identify failure mechanisms of unidirectional carbon/epoxy composites. For this purpose, carbon/epoxy composites were tested in tensile test by two different loading conditions. For the first specimen, the load was applied through fiber direction (T0) and for the second specimen, the load was applied perpendicular to the fiber direction (T90), AE signals were collected during experimental test procedure and the signal’s waveforms were decomposed into various wavelet levels that each includes details and approximations so-called. Each data is related to a specific frequency range. The results show that type and percentage of failure mechanisms in various loadings are different. In T0, four micro-failure mechanisms of matrix cracking, fiber/matrix debonding, fiber pull-out and fiber breakage were observed and Fiber pull-out was determined as main inter-phase failure mechanism. Debonding were dominant failure micro mechanisms of T90. The results were verified with scanning electron microscopic observations.