The performance of fiber-reinforced polymer (FRP) composites is limited by susceptibility to transverse microcracking and interfacial debonding. In this work, we introduce a microcapsule-based self-reporting and self-healing strategy for simultaneous detection and repair of cracks in FRPs. This dual functionality is achieved via the microencapsulation of a solvent-based healing agent doped with aggregation induced emission (AIE) luminogens and the subsequent dispersion of such microcapsules in carbon prepreg containing a thermoplastic-toughened epoxy matrix. Composite specimens are fabricated with a [0/90/0] stacking sequence from self-healing prepreg tapes and loaded in transverse tension until crack saturation is achieved. The transverse cracks rupture the microcapsules and release of the encapsulated solvent into the crack plane. Crack healing is achieved by the dissolution and redistribution of thermoplastic-rich regions into the damage volume. Evaporation of the solvent leaves solid thermoplastic in place of the crack and allowing AIE luminogens to aggregate and fluoresce. Using a small load frame that mounts under an optical microscope, we measure full-field surface strains during loading of the composite specimens via digital image correlation (DIC). The self-reporting functionality is evaluated by correlating the presence of microcracks with regions of damage-induced fluorescence. The healing efficiency of the composite specimens is assessed by comparing the applied stress levels and strain fields associated with cracking events pre- and post-healing.