The traditional lag dampers used in rotorcraft application are unable to produce adequate levels of damping for 2X speed coaxial compound rotorcraft which use rigid, hingeless blades. The current paper shows the possibility of having an intrinsic passive damping solution through the use of carbon nanotubes (CNTs) embedded in the interlayer region of a carbon fiber reinforced epoxy composite laminate. The CNTs are assumed to have a reversible stick-slip damping mechanism in the composite. The dissipation caused by the slip between the CNTs and the epoxy matrix is proportional to the slippage length of the CNTs. A laminated composite model is used to simulate a spar with alternating plies and CNT interlayers. The model is used to predict the stresses, strains and damping associated with the plies and interlayers. The laminated composite damping model is validated by comparing the predictions with experimental results from the literature. The model is used to demonstrate the effect of the CNT interlayers on the damping of the composite blade. The effect of blade RPM and key CNT parameters such as aspect ratio (l/d) and critical shear stress (τc) on the damping of the blade is also investigated. A loss factor of over 8% and 6% was observed with optimally configured parameters for soft and stiff in-plane rotors respectively. Overall, the results suggest significant damping augmentation is achievable from the use of CNT interlayers in carbon/epoxy blades.