An effective approach for an embedded piezo diagnostic layer into thick composite material is presented. The effectiveness of the approach is assessed in comparison to the surface-mounted layer. The proposed manufacturing alleviates difficulties associated with trimming edges of composites when embedding wires. The Electro-Mechanical Impedance technique is used to access the integrity of the piezoelectric sensors bonding process. Comparisons of ultrasonic guided waves are made between embedded and surface-mounted diagnostic layers and their penetration through and across the thickness of the composites. Temperature influences with the range from −40 °C up to 80 °C on embedded and surface-mounted guided waves are investigated. An investigation is carried out into the relationship between amplitude and time-of-flight with temperature at different excitation frequencies. The temperature has significant but different effects on amplitude and phase-shift of guided waves for the embedded layer compared to the surface-mounted layer. A Laser Doppler Vibrometer is used to identify the blue tack and impact damage. Both embedded and surface-mounted layers are shown to be an effective means of generating detectable wave scatter from damage.