The laminated Ti/TiNb composites with diffusion layers were fabricated by spark plasma sintering combined with hot rolling. In-situ tensile test monitored by SEM was applied to analyze the crack initiation and propagation behaviour of the composites in different states, so as to understand the effects of Ti component thickness and diffusion layer microstructure on the fracture behavior of the composites. The results show that the length of microcracks can be effectively controlled by reducing the thickness of Ti component, thus delaying the extension of shear bands in adjacent TiNb layers. The microstructure of diffusion layer has a significant effect on the fracture behavior of the composite. Compared with the composite with “hard” diffusion layer, the composite with “soft” diffusion layer has more cracks and shear bands before tensile fracture, and shows a more tortuous crack propagation path after the overall fracture.