In this paper, the applicability of spatial continuous wavelet transform (CWT) technique for damage identification in beam structures is analysed by the application of different wavelet functions and scales. The scale, which is most suitable for damage identification, is found by calculating standardized damage index (SDI) and the index, - called damage estimate reliability (DER) for the scales under investigation. Another method, based on mode shape curvature squares (MSCS), is also applied to identify the damage. It is shown that CWT and MSCS methods use exclusively mode shape data from the damaged structure. Damage identification results in terms of DER are compared for both methods. To examine the limitations of the proposed methods, different numbers of measurement points along the beam’s axis are used. Effectiveness and robustness of the proposed algorithms are demonstrated experimentally on two aluminium beams containing single mill-cut damage and subjected to different boundary conditions. The modal frequencies and the corresponding operational deflection shapes are obtained by using scanning laser vibrometer with PZT actuator as vibration excitation source.