In this study we investigate the feasibility of detecting structural damage using the Hilbert-Huang Transform (HHT) method. A damage detection index, which we call the ratio of equivalent damping ratio (RED), is proposed. The damage detection index is evaluated using the HHT and the Fast Fourier Transform (FFT) methods for the analysis of shaking table test data obtained for benchmark models based upon the Kobe and El Centro earthquakes. The results indicate that, when the response of the structure is in the elastic region, the RED value changes only slightly in both the HHT and the FFT spectra. In addition, when the structural response is nonlinear (i.e., member yielding occurs), the RED and peak ground acceleration curves indicate the incremental change in the HHT spectra. However, the same phenomena cannot be found in the FFT spectra. Moreover, there is greater change in the value of the RED for the top floor than for the other floors. Furthermore, structural damage is detected only when acceleration response data from the top floor is used. Therefore, the RED estimated from the smoothed HHT spectra is an effective and sensitive index for detecting structural damage. The proposed RED strategy will be used to establish an on-line health monitoring scheme for detecting structural damage in steel structures right after the occurrence of ground motion.