Abstract: The determination of damage location and damage degree are important for safe service of derrick steel structures. To diagnose the damage correctly, a novel identification approach for derrick steel structures is proposed based on two indices, frequency and equivalent damage coefficient. Firstly, damage location is identified through the changes in the ratio of two neighboring frequencies and the ratio of the square of two neighboring frequencies. Secondly, equivalent damage coefficient is taken as the synthetical index to identify the existence and degree of system damage or element damage, and the relation between the frequency change rate and equivalent damage coefficient is established. After that, the objective function based on frequency is constructed, and an optimization method is applied to estimate quantitatively the damage degree. Finally, damage location and degree of some type of derrick steel structures are identified using the first three frequencies. Compared with other identification methods, the proposed method is more efficient and working-saving. This method can be also used for the damage diagnosis and health monitoring for other large structures.