The mechanical properties of unidirectional flax fibre reinforced unsaturated polyester resin composites were studied with particular emphasis on their tensile deformation behaviour. These materials displayed characteristic non-linear behaviour when loaded parallel to the axis of the fibre, with a distinct knee preceding a drop in stiffness. Further deformation resulted in strain hardening behaviour. Load cycling and acoustic emissions analysis were used to investigate the nature of the knee and it was found that this corresponded with yielding behaviour in the composite. A well-defined yield point could be identified, which in composites of around 60% fibre volume fraction, occurred at a strain of some 0.12% and a tensile stress of 32 MPa. Varying the interfacial properties, through chemical modification of the fibre prior to lamination, was found to have a marked effect upon the onset of yielding and the yield point itself, as well as the deformation and fracture behaviour of the laminate. It is considered that this behaviour is intimately linked to the straining behaviour of the fibre as well as the fibre-matrix interaction and hypotheses to explain the observed behaviour are presented.