This paper describes the application of vibration modal analysis for detecting, monitoring and locating damage inside a wooden wall structure, by evaluating damage-sensitive parameters such as resonant frequencies and operating deflection shapes (ODS). Artificial damage was created in one of the walls of a specially constructed room. The wall was excited using an impact hammer and its frequency response was measured with a laser vibrometer. Damage-sensitive parameters were extracted from the frequency response and utilized for assessing damage, both qualitatively and quantitatively. Resonant frequency shifts and changes in ODS were used for detecting and monitoring the progression of damage, qualitatively. These methods make direct use of FRF data and mode shapes for damage assessment, which will help a lot in identifying damaged walls.