The damaged response of a composite lamina depends on various mechanisms that take place at the microlevel, i.e., at the level of the fiber and matrix. The present work focuses on developing a ply level continuum damage model for point-wise stiffness degradation through simplified representation of the microlevel damage. A three dimensional micromechanical analysis of a single cell representative volume element is carried out for various volume fraction, and levels of damage. The model brings out the coupled effect of damage on the effective point-wise ply level stiffness. Further, the numerical results are employed to develop a functional continuum representation of stiffness degradation as a function of the damage parameters and fiber volume fraction perturbations. The micromechanics model is consistent with experimentally observed stiffness degradation, i.e., a strong influence of fiber breakage and fiber matrix debond, and a weak influence of normal cracking of matrix. The proposed model can be considered as an improved version of the widely accepted diffused (meso) damage models, i.e., DML. The study also gives a generalized and consistent definition for the free energy, which can be used for modeling growth of damage. © 2011 Elsevier Ltd.