Damage characterization in a structural monitoring system is defined by increasing levels of specificity, considering: damage detection, localization, severity, damage type, and eventually damage forecast. This paper presents a methodology for analyzing accelerometers data installed on a full-scale suspension bridge. Applying dynamic identification techniques, fundamental frequencies and mode shapes of the structure can be obtained and used as features for further physics based statistical analysis. Complementing sequential damage detection and damage localization algorithms one can achieve a high detection and localization accuracy. Time variation of the physical dynamic parameters, allows detecting and locating damage within the structure. Test data of full scale bridge that suffered severe structural damage, included operational and environmental variations, which hinder proper diagnostics. The application of these techniques to a real case study with reported damage, allows evaluating the effectiveness of the proposed algorithm and diagnostic applications expected for other bridges with similar structural configurations.