Aerographite (AG) is a mechanically robust, lightweight synthetic cellular material, which consists of a 3D interconnected network of tubular carbon [1]. The presence of open channels in AG aids to infiltrate them with polymer matrices, thereby yielding an electrical conducting and lightweight composite. Aerographite produced with densities in the range of 7-15 mg/cm3 was infiltrated with a low viscous epoxy resin by means of vacuum infiltration technique. Detailed morphological and structural investigations on synthesized AG and AG/epoxy composite were performed by scanning electron microscopic techniques. The present study investigates the fracture and failure of AG/epoxy composites and its energy absorption capacity under compression. The composites displayed an extended plateau region when uni-axially compressed, which led to an increase in energy absorption of ~133% per unit volume for 1.5 wt% of AG, when compared to pure epoxy. Preliminary results on fracture toughness showed an enhancement of ~19% in KIC for AG/epoxy composites with 0.45 wt% of AG. Observations of fractured surfaces under scanning electron microscope gives evidence of pull-out of arms of AG tetrapod, interface and inter-graphite failure as the dominating mechanism for the toughness improvement in these composites. These observations were consistent with the results obtained from photoelasticity experiments on a thin film AG/epoxy model composite.