A method for localization and severity assessment of structural damages is proposed. The algorithm works based on nonlinear behavior of certain type of damages such as breathing cracks which are called active discontinuities in this paper. Generally, nonlinear features are more sensitive to such damages although their extraction is sometimes controversial. A major controversy is the imposition of spurious modes on the expansion of the signal which needs to be addressed for an effective application and robustness of the method. The energy content of Intrinsic Mode Functions (IMFs), which are the resultants of Empirical Mode Decomposition (EMD), and also the shape of energy distribution between these modes before and after damage, are used for localization and severity assessment of the damages. By using EMD, we preserve the nonlinear aspects of the signal while avoiding imposition of spurious harmonics on its expansion without any assumption of stationarity. The developed algorithms are used to localize and assess the damage in a steel cantilever beam. The results show that the method can be used effectively for detecting active structural discontinuities due to damage