Recent interest in the use of wireless sensor networks for structural health monitoring (SHM) is mainly due to their low implementation costs and potential to measure the responses of a structure at unprecedented spatial resolution. Approaches capable of detecting damage using distributed processing must be developed in parallel with this technology to significantly reduce the power consumption and communication bandwidth requirements of the sensor platforms. In this investigation, a damage detection system based on a distributed processing approach is proposed and experimentally validated using a wireless sensor network deployed on two laboratory structures. In this distributed approach, on-board processing capabilities of the wireless sensor are exploited to significantly reduce the communication load and power consumption. The Damage Location Assurance Criterion (DLAC) is used for localizing damage. Processing of the raw data is conducted at the sensor level, and a reduced data set is transmitted to the base station for decision-making. The results indicate that this distributed implementation can be used to successfully detect and localize regions of damage in a structure. To further support the experimental results obtained, the capabilities of the proposed system were tested through a series of numerical simulations with an expanded set of damage scenarios.