In this paper, we use the change of the identified transfer function parameters of structural dynamics for damage detection of a flexible beam system. The technique used for damage detection is based on the correlation between the identified parameter change and the change of the analytical model, such as a finite element model, due to damage. A least-squares technique is developed to identify the transfer function parameters from the experimental data. In the damage detection process, first the location of damage is identified, then the intensity of damage is estimated. Applying the presented approach to a flexible beam, only one sensor is needed to successfully locate the damage position and accurately estimate the intensity of damage.