This paper introduces a FBG (fiber Bragg grating) based AE (acoustic emission) sensing system for use in health monitoring of composite wind turbine blades. In this study, a multiplexing high speed FBG sensor system was developed with a spectrometer-type demodulator based on a linear photo detector. Pencil break test was performed using an FBG sensor and the results were compared with the results of piezo-based AE sensor. For the performance test of fracture sensing in composite materials, a down-scaled wind turbine blade was fabricated and drop impact tests were performed. Arrayed 4 FBG sensors were installed in the skin of wind turbine blade and impacts of 15 J energy were applied by a drop weight. The frequency characteristics of impact induced AE signals were examined with short-time Fourier transform focused on the leading waves. Finally, the onset of fractures in composite structure was successfully assessed using arrayed FBG sensors.