Cold recycled mixtures with asphalt emulsion (CRME) suffer the majority of damage from freezing and thawing cycles in seasonal freezing regions. However, an effective model for describing the internal damage evolution behavior of the CRME is still lacking. The objective of this study is to explore the performance of the destroy and damage model of the CRME subjected to freezing and thawing cycles with various water contents. The damage degree of performance at 60 °C and −10 °C, as well as the mechanical properties, were first analyzed in the laboratory. Then, the damage evolution models were established based on macroscopic properties, reliability, and damage theory. The results showed that the performance of the CRME decreased obviously as the number of freezing and thawing cycles increased; after 20 freezing and thawing cycles, the damage degree of 60 °C shear strength and 15 °C and −10 °C indirect tensile strength were 21.5%, 20.6%, and 19.8% at dry condition, but they were 34.9%, 31.8%, and 44.8% at half water saturation condition and 51.5%, 49.1%, and 56.1% at complete water saturation condition; the existence of water and the phase transition of water changed the failure characteristics of the CRME; the correlation coefficient of the damage model parameters was more than 0.98, so the damage evolution model could reveal the internal damage evolution law. Clearly, the freezing and thawing cycles accelerated the damage caused by CRME.