The application of fibre reinforced thermoplastic composites in aerospace industry has increased drastically in the last decade. Carbon fibre/Polyether-ether-ketone (C/PEEK) is one of the high-performance thermoplastic composites and is replacing metallic and thermosetting counterparts in various aircrafts components. Parts made from such composites undergo multiple heat treatment cycles, and each cycle involves processing at temperatures above melt. At these temperatures, thermal stability is a limiting factor, which results in severe thermal degradation of the polymer, especially in oxidative environments. For this project, the thermal degradation of 8-ply unidirectional C/PEEK composites is investigated. The objectives include finding the reduction in morphological properties of PEEK polymer due to degradation over four different processing temperatures (385, 405, 425, and 445°C), and times (10, 30, 60, and 90 minutes), in two processing environments (air and nitrogen), exploring the effect of oxygen and temperature on degradation, and evaluating the mechanical performance through three-point bending. Thermal analysis through Differential Scanning Calorimetry (DSC) showed that the crystallinity reduces from 32% for an untreated laminate to 28% for the lowest heat treatment condition (385°C, 10 minutes). From there, a steady reduction is observed, with 15% at 425°C, 60 minutes, and 0% at 425°C, 90 minutes and 445°C, 90 minutes. A contour plot for polymer property reduction based on crystallinity serves as a processing guideline for C/PEEK laminates. DSC analysis through the thickness of air treated laminates showed that surface plies degrade faster than the inner plies. This effect is not observed in a nitrogen environment. This showed the effect of oxygen on the surface. Though inner plies were shielded from oxygen exposure, they still showed a higher degradation than nitrogen treated laminates, showing that diffusion of oxygen through the laminates has taken place. At 425°C and 445°C, in air, the through thickness difference is higher compared to 385°C. So, in oxygen environment, polymer degrades faster at higher temperatures than at lower temperatures. In nitrogen, at 385°C, there is almost no degradation, whereas the other three temperatures show an increased degradation. The rate of degradation in different environments and at different temperatures is characterized by computation of activation energies. The air treated laminates showed an activation energy of 126 kJ/mol, whereas, nitrogen treated laminates has 193 kJ/mol. 3-point bending tests are performed to observe matrix failure. No failure was observed at 10, 30, and 60 minutes at 385°C, but from 405°C, cracks starts to appear and cracks initiates at lower stresses with increasing heat treatment conditions.