The use of ultrasound for detecting material damage from microcracks within a heterogeneous medium is discussed. The ability to detect the damage is dependent on the amount of scattering due to the microcracks relative to the scattering from the heterogeneous background. The damage is modeled in terms of penny‐shaped microcracks that are assumed to be randomly oriented and uniformly distributed. Scattering from the heterogeneous microstructure is considered in terms of two types of media: polycrystalline and two‐phase. Expressions for attenuation and backscatter coefficient are derived using stochastic wave theory for both the assemblage of microcracks and for the microstructure. Incident longitudinal and shear waves are both considered. Wave speed changes are shown to be weak indicators of damage. However, attenuation and backscatter are shown to change sufficiently for damage detection. The scattering from the microcracks is assumed independent of the microstructural scattering. Thus, the results are thought to provide a lower bound on damage detectability. The results are applicable to detection of microcracking for various applications including thermal fatigue damage in concrete and mechanical fatigue damage in metals. © 2003 American Institute of Physics