In planning a bridge health monitoring with minimum sensors for long-term monitoring, it is necessary to accurately predict the bridge behavior including its nonlinearity and identify the damaged bridge components when a strong earthquake strikes. This article presents a methodology for the selection of sensors and their arrangement for detecting seismic damage in an in-service steel plate girder bridge system. In this study, a detailed span-based model was developed for the finite element simulation including the effect of the rubber bearing and piers, and the damage control by the side blocks. The finite element dynamic simulation was carried out with input earthquake acceleration to investigate the seismic behavior and grasp the damageable parts during an earthquake. Based on the results of finite element dynamic simulation, a fault tree analysis was carried out to reveal more about the bridge behavior, the failure modes, and the occurrence of damage. It was found that the side block, the bearing stiffener, and the horizontal bracing on the fixed side of the bridge are most important to be monitored for the evaluation of soundness of a plate girder bridge immediately after an earthquake. Finally, a sensor arrangement for the bridge was proposed based on the analysis results.