Silane-coated glass microspheres randomly embedded in an epoxy polymer matrix have been employed as a model system to investigate the degradation of disordered composite materials by water, and to test various models of deformation and fracture. Numerous composites containing sodalime (A) glass in the range 0 to 25% by volume were tested dry and immersed in saturated NaCl at 40 °C for periods up to 70 days before testing. Enhanced osmotic water uptake due to percolating interface damage was observed for composites containing more than 15% glass. The electrical resistance of similar composites filled with conducting spheres confirmed the existence of a percolation transition, though with high resistance values implying no direct contact of the spheres. Tensile measurements conducted on dry material at a nominal strain rate of about 10−3 s−1 showed an increase in elastic modulus and a decrease in the fracture strength with increasing glass content. New detail was apparent in these curves and confirmed by statistical analyses. For wet specimens, in addition to a general embrittlement effect of water absorption, there was a distinct plateau or small peak in fracture strength in the range 9 to 12% glass, and an abrupt drop between 12 and 15%. The plateau can be related to favorable crack interaction effects between disconnected clusters of interfaces just below the percolation threshold. The steep increase in elastic modulus with glass content seen in the dry material vanished entirely in wet material, which behaved like a porous polymer above 6% glass, owing to osmotic interface damage within particle clusters.