Previous investigation on the crashworthiness of braided composite tubes did not take the relationship between adiabatic shear failure and temperature rise into account during dynamic loading. In this study, transient temperature rise caused by adiabatic effect was detected and captured for the three-dimensional braided carbon/epoxy composite specimens during axial impact compression under 600–800/s. A mesostructure model was established based on three-dimensional braided tube architecture to numerically characterize the mechanical and thermal response in material. Based on the results, non-uniform temperature distribution shows good correlation with adiabatic shear failure in the material. Key scientific issues are discovered including the position, morphology, time sequence, and response process of the temperature rise. The catastrophic shear behavior with accelerated temperature rise occurs after the peak force and accompanies the progressive failure process. Nodes having room temperature in the adiabatic shear zone indicates that some positions in plastic zone may still behave as elastic state. There exists different plastic slip distances due to shear instability in the path along or crossing the adiabatic shear band. Through this investigation, the model considering the adiabatic effect was able to show the dynamic shear mechanism involving the fracture position, morphology, and progressive thermo-mechanical response of the temperature rise, which cannot be revealed by experimental testing.