The analysis of acoustic emission signals has been widely applied to damage detection and damage characterization in composites. Features of acoustic emission signals, such as amplitude, frequency, and counts, are usually utilized to identify the type of a damage. Recently, time-frequency distribution techniques, such as the wavelet transform and the Choi-Williams distribution, have also been applied to characterize damage. A common feature of these approaches is that the analysis is on the acoustic emission signal itself. Nevertheless, this signal is not the wave source signal as it has been modulated by the signal transfer path. Real information on damage is actually hidden behind the signal. To reveal direct information on damage, a blind deconvolution method has been developed. It is a quefrency domain method based on the cepstrum technique. With the method, acoustic emission signal is demodulated and information on the wave source can be revealed and thus damage can be identified. This paper presents preliminary test data to assess the validity of the proposed methodology as a means of identifying specific damage modes in fiber reinforced composites.