In this paper a damage identification algorithm for beam structures with multiple damage sites based on wavelet transform method of vibration mode shapes is reported. A complex morlet function of order 1-1 is chosen as a wavelet function. Wavelet transform coefficients serve as a damage indices which are standardized according to statistical hypothesis approach, yielding a standardized damage index distribution over beam coordinate. The peaks with the largest amplitude correspond to the zone of damage. Finite element simulations of proposed methodology involving various artificial noise levels and reduction of mode shape input data points are carried out. Results show that the algorithm is capable of capturing the areas of damage.