Epoxy-based polymer composites are widely used in structural applications. Environmental degradation through moisture absorption considerably degrades the performance of these materials, particularly in the aviation and automotive industries. Absorbed moisture behaves differently in pristine and damaged composites. In a pristine structure with fewer diffusion pathways and voids, absorption is generally less and there is a higher degree of interaction between the resin and water molecules which limits water mobility. Conversely, in a damaged structure, voids and micro-cracks allow accelerated diffusion and a greater proportion of “free” molecular water. The ratio of free to bound water states can be exploited to characterize damage via the dielectric properties. Structures with greater damage, and thus greater proportion of free water molecules, will exhibit a higher relative permittivity than a pristine structure, independent of water content. Without damage, water is more restricted from rotating under the influence of an applied electromagnetic field, leading to a lower relative permittivity. To simulate this phenomenon on a molecular scale, MD simulations are performed to characterize the moisture interaction in systems with the same epoxy and hardener constituents but with varying degrees of cross-linking. The system is constructed in Materials Studio and interactions are modeled using the COMPASS force-field provided by Accelerys. The epoxy molecules and the curing agent are first modeled in the Amorphous Cell module and equilibrated using the NVT ensemble. Cross-linking is executed based on a reaction cut-off distance and the desired degree of cross-linking. The diffusion coefficients are evaluated and the effect of hydrogen-bonding of the polar molecules of the resin with water molecules is investigated. Finally, the dielectric functions of different epoxy-water systems are used to establish a connection between the concentration of free and bound water and experimental relative permittivity of a composite structure.