Although smart textile materials have significant importance because of their advanced technology, they haven’t replaced the conventional electronics completely. Nevertheless, these smart textile materials are now developed into the fabrication of in-situ structural health monitoring systems for structures and wearable technologies. The objective of this study was to develop a flexible microscale conductive fiber for in-situ strain monitoring applications by depositing uniform coating film of silver (Ag) nanoparticles on the surface each filament of nylon yarn by electroless plating process without jeopardizing the integrity of each material. The sensitivity of this Nylon/Ag conductive fiber was calculated experimentally, and the gauge factor (GF) was found to be in the range of 21–25 which showed a high sensitivity of the conductive fiber to the applied strain. Then, Nylon/Ag conductive fiber was fractured under tensile loading and a good agreement between the electromechanical response of the conductive fiber was found with repeatability of the results. Then, this Nylon/Ag conductive fiber was inserted in composite specimens at four different directions i.e. 0°, +45°, and 90° respectively in each ply and specimen was machined in a star shape in which each leg represented the direction of the individual position of the Nylon/Ag conductive fiber. The composite star specimen was then subjected to tensile cyclic loading and results showed excellent reproducibility in the mechanical behavior of composite specimens and electrical signals of each conductive fiber although, the conductive fiber in each position showed distinct response because of their respective direction. The increase or decrease in the resistance of the fiber sensor signified the presence of tensile or compressive strain respectively and the intensity of the signal quantified the amount of deformation. The results demonstrated the way to design a cost-effective microscale smart textile for strain monitoring. This Nylon/Ag conductive fiber can then be used in in-situ structural health monitoring even in high strain applications because of their good sensitivity, flexibility, and stability.