Delamination damage at a bolt hole in a composite stiffened panel was detected using a built-in piezoelectric active sensor array. Various signal processing techniques were used to detect an invisible small scale delamination around a fastener hole due to localized transverse loading. A built-in piezoelectric sensor array was used to generate diagnostic signals and to measure response signals. Then, the response signals were processed to extract damage-sensitive features. Damage indexes were calculated to estimate the severity and location of the damage from the features.