Dams are essential infrastructures as they provide a range of economic, environmental, and social benefits to the local populations. Damage in the body of these structures may lead to an irreparable disaster. This paper presents a cost-effective vibration-based framework to identify the dynamic properties and damage of the dams. To this end, four commonly occurred damage scenarios, including (1) damage in the neck of the dam, (2) damage in the toe of the structure, (3) simultaneous damage in the neck and the toe of the dam, and (4) damage in the lifting joints of the dam, are considered. The proposed method is based on processing the acceleration response of a gravity dam under ambient excitations. First, the random decrement technique (RDT) is applied to determine the free-vibration of the structure using the structural response. Then, a combined method based on Hilbert–Huang Transform (HHT) and Wavelet Transform (WT) is presented to obtain the dynamic properties of the structure. Next, the cubic-spline technique is used to make the mode shapes differentiable. Finally, Continuous Wavelet Transform (CWT) is applied to the residual values of mode shape curvatures between intact and damaged structures to estimate the damage location. In order to evaluate the efficiency of the proposed method in field condition, 10% noise is added to the structural response. Results show promising accuracy in estimating the location of damage even when the structure is subjected to simultaneous damage in different locations.