Most Tibetan ancient timber structures have damage and ageing problems. In order to protect these buildings, damage identification method for this kind of structure is studied. Damages and defective mechanisms of column and beam of Tibetan ancient timber structure are summarized and analyzed on the basis of field survey results. Numerical simulations of damage identification of a typical multi-layer Tibetan ancient timber structure are carried out. Three different damage scenarios are accurately identified by the dynamic response sensitivity method. During the establishment of the finite element model of the structure, random errors are added to the elastic modulus of each structural component in order to simulate the discrete characteristics of physical parameters of ancient structural components. Modified regularization method is used to solve the identification equation. Influences of measurement noise are taken into account in the simulation process. Results of numerical simulation can provide references for actual damage identification of this kind of structure.