In this paper, a bio-inspired carbon-fibre/epoxy composite with nacre-like tiled microstructure is designed, synthesised and tested. Analytical models are developed to predict the energy dissipation and crack deflection properties of such composite, and the predictions for the stress-strain response during tile pull-out are validated against direct numerical simulation. Suitable configurations for tile geometry with interlocks are then identified (with dimensions of the order of 0.6 mm) and used for the subsequent prototyping. In-situ three-point bend tests are then carried out in a SEM environment, showing the capability of the interlocking micro-structure in deflecting the crack, avoiding sudden failure in the most highly loaded cross-section of the specimen. The results suggest that further damage diffusion could in principle be achieved by additionally modifying the interface between tiles.