In transportation sector, there is an increasing need for joining dissimilar materials for lightweight structures; however, substantial barriers to the joining of dissimilar materials have led to an investigation and development of new joining techniques. Friction stir blind riveting (FSBR), a newly invented method, has shown great promise in joining complex structures with dissimilar materials. The process can be utilized more effectively if knowledge regarding the failure mechanisms of the FSBR joints becomes available. This research focuses on investigating the different mechanisms that lead to a failure in FSBR joints under lap-shear tensile tests. An in situ, nondestructive, acoustic emission (AE) testing method was applied during quasi-static tensile tests to monitor the initiation and evolution of damage in FSBR joints with different combinations of dissimilar materials (including aluminum, magnesium, and a carbon-fiber reinforced polymeric composite). In addition, a fractographic analysis was conducted to characterize the failure modes. Finally, based on the analysis, the distinct failure modes and damage accumulation processes for the joints were identified. An AE accumulative hit history curve was found to be efficient to discriminate the deformation characteristics, such as the deformation zone and failure mode, which cannot be observed through a traditional extensometer measurement method. In addition, the AE accumulative hit history curve can be applied to predict the failure extension or moment of FSBR joints through an identification of the changes in curve slope. Such slope changes usually occur around the middle of Zone II, which is defined in this study.