Cryogenic electron microscopy (cryo-EM) has the potential to reveal the molecular details of biological processes in their native, cellular environment at atomic resolution. However, few cells are sufficiently thin to permit imaging with cryo-EM. Thinning of frozen cells to <500 nm lamellae by cryogenic focused ion beam (FIB) milling has enabled visualization of cellular structures with cryo-EM. FIB-milling represents a significant advance over prior approaches because of its ease of use, scalability, and lack of large-scale sample distortions. However, the amount of damage caused by FIB-milling to the generated thin cell section has not yet been determined. We recently described a new approach for detecting and identifying single molecules in cryo-EM images of cells using 2D template matching (2DTM). 2DTM is sensitive to small differences between a molecular model (template) and the detected structure (target). Here we use 2DTM to demonstrate that under the standard conditions used for machining lamellae of biological samples, FIB-milling introduces a layer of variable damage that extends to a depth of 60 nm from each lamella surface. This thickness exceeds previous estimates and limits the recovery of information for in situ structural biology. We find that the mechanism of FIB-milling damage is distinct from radiation damage during cryo-EM imaging. By accounting for both electron scattering and FIB-milling damage, we find that FIB-milling damage will negate the potential improvements from lamella thinning beyond 90 nm.