A new method for both local damage(s) identification and input excitation force identification of beam structures is presented using the dynamic response sensitivity-based finite element model updating method. The state-space approach is used to calculate both the structural dynamic responses and the responses sensitivities with respect to structural physical parameters such as elemental flexural rigidity and with respect to the force parameters as well. The sensitivities of displacement and acceleration responses with respect to structural physical parameters are calculated in time domain and compared to those by using Newmark method in the forward analysis. In the inverse analysis, both the input excitation force and the local damage are identified from only several acceleration measurements. Local damages and the input excitation force are identified in a gradient-based model updating method based on dynamic response sensitivity. Both computation simulations and the laboratory work illustrate the effectiveness and robustness of the proposed method.