Moisture diffusion studies were carried out on the carbon/epoxy composite at V(f)=0.7 and have been performed for three different cases viz., 60 degrees C/85%, relative humidity (RH), 60 degrees C/95% RH, and 60 degrees C/100% RH, to find out moisture absorption as a function of relative humidity. The specimens under the above conditions exhibited Fickian diffusion behavior. The effect of moisture absorption on the dynamic mechanical behavior and on the fiber/matrix interface was investigated. The humidity combined with the temperature effects may cause significant changes in the Tg of the matrix, and toughness affecting the laminate strength. Moisture absorption was correlated to the fracture mode of the laminate demonstrating the deleterious effect of moisture on the interface which leads to debonding between fiber and matrix. This behavior was investigated by scanning electron microscopy. The effect of cyclic thermal and humidity fluctuations is also characterized by ILSS.