In this research, the strength and deformation behavior of transversely isotropic composite rock-like material, which consists of a hard rock-like material and a weak rock-like material, are first investigated under different confining pressures by using a rock triaxial testing system. The triaxial compression results show that the composite rock-like material shows distinct anisotropy, the strength shows a “U” type variation with respect to the inclination angle, and the apparent friction angle value and cohesion value show dispersion with respect to the inclination angle. With the advance of scientific instrumentation, X-ray computed tomography (CT) scanning has been used as a powerful inspection tool and has been applied to many fields for non-destructive structure and failure analysis. After the compression tests, a Nanotom 160 high-resolution micro-CT was employed to investigate the failure mechanism of transversely isotropic composite rock-like material on the micro-level. The 3D volume renders are in good agreement with the actual surface crack photographs of transversely isotropic composite specimens, which demonstrating that X-ray micro-CT scanning can be used to explore the damage of rock-like material. The internal crack distribution and damage can be clearly observed from the vertical and horizontal cross-section images of 3D volume renders. It further reveals that the failure mode of transversely isotropic composite rock-like specimens is transformed from tensile failure at low inclination angles to shear slippage at medium inclination angles. The impact of confining pressure on the failure mode and crack distribution from the 3D volume renders, which is also discussed, reveals that the mechanical properties of hard and weak rock materials are the key to control the crack distribution with increasing confining pressure.