A new system identification method based on tunnel deformation data is proposed to find the damage in the lining structure. For this, an inverse problem in which the deformation data and dead load of concrete lining are known a priori is introduced to estimate the degree and location of the damages. Models based on uniform reduction of stiffness and homogenized crack concept are individually employed to compare the applicability and relative advantages of the models. Numerical analyses are peformed for the idealized tunnel structure and the effect of white noise, common in most measurement data, is also included to better understand the suitability of the proposed models. As a result, model 1 based on uniform stiffness reduction method is shown to be relatively insensitive to the noise, while model 2 with the homogenized crack concept is proven to be easily applied to the field situation since the effect of stiffness reduction is rather small.