The micromechanics of stress transfer in a PBO/polypropylene system were followed using a microdroplet model composite and a synchrotron microfocus X-ray diffraction technique. High quality X-ray diffraction patterns were obtained from both the PBO-HM fiber and the polypropylene matrix. Diffraction patterns were obtained from the fiber inside the PP droplet by subtraction of a PP diffraction pattern from that of the composite. It was found that there was good stress transfer at the fiber-matrix interface and that significant residual stresses occurred in the fiber inside the droplet due to the cooling and crystallization of the polypropylene. The maximum residual stress of 0.55 GPa measured corresponded to an axial fiber strain of 0.2% compressive strain, similar to the literature values for compressive fiber failure.