For coated paperboard with large deformations, there is limited knowledge on the mechanisms that lead to coating damage and on the key properties that affect damage. Large deformations produce complex non-linear mechanical responses which often result in significant internal damage. The objective of this work was to establish methods to directly measure local deformation at a fold using a stereo digital image correlation (DIC) technique and a folding device designed in-house. This allowed monitoring of deformation from both cross-section and surface views, from which curvature and strain could be analyzed. This approach allowed observation and quantification of the initiation and propagation of damage. Testing showed that elastic estimation of deformation is valid only at very small curvatures but is still qualitatively useful. It was found that CD fold line shows a lower strain than MD fold line at a given curvature, but it ultimately reaches a higher level of surface strain. Additionally, localized maximum surface strain was shown to correlate better with surface damage at fold than the average surface strain. Furthermore, the introduced discontinuity index can provide a useful tool to compare surface damage at fold even for paperboard samples with different thicknesses.