The effect of environmental and loading conditions on the degradation of Interlaminar Shear Strength (ILSS) of the carbon-epoxy composite specimens was studied in the current research. The hygrothermal conditions capture the synergistic effects of field exposure and extreme temperatures. Short beam shear tests (SBST) were performed to determine the Interlaminar Shear Strength (ILSS) of environmentally aged composite specimens in accordance with ASTM D2344-84. Initially, a standard two-dimensional cohesive layer constitutive model with a cubic traction-separation law was employed in order to simulate the experiment using an in-house Finite Element Analysis code (NOVA-3D). Numerical instabilities encountered using the standard elastic cohesive layer model were overcome by incorporating viscoelastic regularization in the constitutive equations of the cohesive layer. This modification also enabled the analysis to continue beyond the point of peak failure load. The model was able to accurately simulate the load-deflection behavior of most of the SBST specimens aged under various hygrothermal and synergistically applied stress conditions. Further, the effect of displacement rate on ILSS of specimens was studied using NOVA-3D. A PC based life prediction software, Composite Performance Predictive Tool (CPPT), was developed using a mechanism-based degradation model in order to predict the life of a composite structure under given environmental and loading conditions. The software was benchmarked using the test data.