In order to solve the structural damage identification problem of transmission tower, a two-step identification method based on change rate and dissipation rate of modal strain energy is proposed. The damage location is identified by the change rate of modal strain energy method. Then, the modal strain energy dissipation rate theory is analyzed further by using the element stiffness matrix after injury. As a result, a more accurate damage quantification equation method is introduced. This method requires only several modals of vibration. The numerical simulation results show that this two-step method can find the damage location and damage degree of transmission towers effectively.