Using vibration methods for the damage detection and structural health monitoring in bridge structures is rapidly developing. However, very little work has so far been reported on timber bridges. This paper intends to address such shortcomings by experimental investigation on a timber beam using a vibration based method to detect damage. A promising damage detection algorithm based on modal strain energy was adopted and modified to locate/evaluate damage. A laboratory investigation was conducted on a timber beam inflicted with various damage scenarios using modal tests. The modal parameters obtained from the undamaged and damaged state of the test beam were used in the computation of damage index, were then applied using a damage detection algorithm utilising modal strain energy and a statistical approach to detect location of damage. A mode shape reconstruction technique was used to enhance the capability of the damage detection algorithm with limited number of sensors. The test results and analysis show that location of damage can be accurately identified with limited sensors. The modified method is less dependent on the number of modes selected and can detect damage with a higher degree of confidence.