In this paper, the structural mode shapes extracted from the finite element model of a simply supported reinforced concrete beam are employed for damage identification using different types of wavelets. To start with, the parity of signals, wavelets, and their convolution, that is, wavelet transform properties, are verified. In light of the mathematical modeling complexity of modal frequency, which relates to the localization and quantification of damage in the reinforced concrete beam, the maximum curves based on multiresolution wavelet transform coefficient differences and the corresponding theoretical assumptions are described and analyzed. It is concluded that the maximum curve reaches a peak value at a specific scale for a specific case, based upon which, a new mode shape based algorithm and damage index are proposed for damage identification. The accuracy of localization as well as the sensitivity of quantification is further discussed.