"Smart Structures" or "Smart Skins" will require structurally integrated sensing systems that can operate in practical situations. Optical sensing techniques are receiving considerable attention for the monitoring of such systems. Single ended polarimetric sensors were utilized with a large dynamic range for strain measurements as surface mounted and embedded strain sensors in composite materials (glass fibre and carbon fibre reinforced polymers). They were also used to monitor the strain and the formation of microcracks in the glue line of carbon fibre reinforced polymer (CFRP) concrete beams. The intrinsic Fabry-Perot was also used as a surface mounted sensor to monitor axial strain of GFRP coupons. Finite Element (FE) modelling was used in order to investigate the stress/strain distributions within the composite material and the embedded optical fibre. The modelling results show excellent agreement with the experimental results and suggest that the soft acrylate coating is debonding, thus reducing the sensor's dynamic range. Actuators and/or Sensors embedded into a host material will disrupt the physical properties of the host. Finite element analysis was used to determine and to minimise the stress concentrations which arise in a "Smart" material system due to the embedded optical fibre sensor. A parametric study was undertaken to determine the theoretical mechanical and thermal properties of the interface coating that minimises the disruption of the polymer composite host material properties due to the optical fibre inclusion. The effects of transverse tensile and thermal loading were studied, and also the residual thermal stress concentrations due to the manufacturing process were taken into consideration. The stress concentrations in the composite host are affected by the dimensions, mechanical and thermal properties of the interface coating. The results show that with careful selection of the interface coating properties die stress concentrations in the host material caused by the optical fibre inclusion can be reduced and be similar to those of the pure host material.