In the first part of this two-part study, filament wound hybrid composite pipes with various stacking sequences were manufactured and mechanical properties such as hardness, ring tensile strength, and burst strength were experimentally investigated. After determining mechanical properties, drilling tests were performed to research machinability characteristics. The second part of the study consists damage analysis and surface quality examination including ring test damage analysis, push-out delamination analysis, borehole damage examination and borehole surface quality. The experimental data suggested that cutting parameters, stacking sequence, and the use of back-up were impactful on the formation and propagation of various types of damages. Especially, the effect of stacking sequence was remarkable. A larger delamination area was formed in Glass-Glass-Carbon (GGC) sample after the ring tensile tests compared to Glass-Carbon-Glass (GCG) and Carbon-Glass-Glass (CGG) samples. In all cases, the utilization of back-up lead to decrease of delamination with 9–40% reduction in surface roughness. When the back-up is not used during drilling, an excessive push-out delamination occurred in all drilling tests. Moreover, CGG samples represented lower push out delamination. In addition, position of the hole depending on the winding angle plays a key role on damage formation and surface quality.