Numerical methods to investigate the flutter response and aeroelastic stability of plates made of composite materials, wherein microcracking occurs in the matrix material, are presented. The analytical modeling of the modulus reduction due to microcracks is based on a self-consistent method with a two-phase model and yields reduced moduli of the composites as functions of the crack density distribution. Both a finite difference and a finite element formulation are presented for two-dimensional laminated plates in supersonic flow. From the numerical results, it is shown that the microcracking in composites results in a loss of aeroelastic stability through nonlinear bimodular oscillation as well as by a direct reduction in the bending stiffness. For three-dimensional flutter problems, however, reduction in the torsional rigidity and changes in elastic couplings may further decrease the stability.