This paper describes the production of an adaptive composite by embedding thin pre-strained shape memory alloy actuators into a Kevlar-epoxy host material. In order to combine the activation and sensing capabilities, fibre Bragg grating sensors are also embedded into the specimens, and the strain measured in situ during activation. The effect of manufacturing conditions, and hence of the initial stress state in the composite before activation, on the magnitude of the measured strains is discussed. The results of stress and strain simulations are compared with experimental data, and guidelines are provided for the optimization of the composite. Finally, a pilot experiment is carried out to provide an example of how a strain-stabilizing feedback mechanism can be implemented in the smart structure.