A glass reinforced polymer (GFRP) material is a newly developed material for slope reinforcement. In this study, distributed piezoelectric transducer (PZT) and strain-transfer model are developed to characterize the interface shear behavior and crack propagation in GFRP soil nails. Based on PZT, a damage index (DI) is defined to characterize the crack propagation of anchor solid according to the amplitude change. In addition, and DI0 is defined from the difference between calculated strain without considering crack and measured strain in anchor surface is developed to characterize crack propagation with a strain-transfer model. Finally, an experiment is conducted for the assessment of a sand-cement mixture reinforced by GFRP bar. Results in terms of DI based on PZT and DI0 based on strain transfer model can effectively characterize the internal crack propagation. The comparisons indicate that the analysis error between DI and DI0 is less than 10%. A further analysis indicates that the health condition of GFRP soil nail can be determined with the distributed PZT and strain-transfer model. Therefore, the characterization method of crack in this study can provides certain application value for slope reinforcement.