AbstractThis paper explores the potential of a new time domain identification procedure to detect changes in structural dynamic characteristics on the basis of measurements. This procedure is verified using mathematical models simulated on the computer. The experiments involve two eight‐storey steel structures with and without energy devices, and a 47‐storey building at San Francisco during the Loma Prieta earthquake. The recursive instrumental variable method and extended Kalman filter algorithm are used as identification algorithms. An exploratory investigation is made of the usefulness of various indices, such as mode shape and storey drift, that can be extracted accurately from identification to quantify changes in the characteristics of the physical system. It is concluded that the change of storey drift is the key information to the detection of changes in structural parameters, from which the proposed system identification algorithm can be applied with an appropriate inelastic model to simulate the dynamic behaviour of real structures undergoing strong ground motion excitati