An investigation about the influence of internal damping on the rotordynamic stability of high-speed flywheel energy storage systems made from carbon fiber epoxy is presented. The research effort consists of simulation studies coupled with experimental testing and evaluation. Damping values obtained from composite beam samples and a composite rotor hub design are shown. The effect of vibration frequency on damping is examined and discussed. These parameters are then used in a series of simulation studies that examine the effects of internal damping on rotordynamic behavior. An experimental model has been developed to verify the conclusions made from the simulations. The experimental testing consisted of creating a prototype rig, characterizing the system parameters, applying these parameters to determine the expected critical speed and experimentally determine the actual critical speed. These results are presented and their implications for flexible hub flywheel designs discussed.