The drilling rig derrick structure will be damaged and destroyed to different degrees due to various reasons during the production process. In order to solve the problem of damage identification in the health monitoring of oil derrick structure in a complex working environment， a method of damage identification of derrick structure based on the generalized flexibility matrix is proposed. Compared with the flexibility matrix method， the generalized flexibility matrix only needs the first few low-order intrinsic frequencies and corresponding modal shapes to ensure the accuracy of the calculation. In the process of constructing the damage control equations， the matrix block solving method is adopted. Compared with the traditional method that requires the expansion of the element stiffness matrix to the overall stiffness matrix dimensions， the proposed solving method only needs to expand the number of rows of the element stiffness matrix accordingly， while the number of columns remains unchanged， so that the computation requirements for constructing the damage identification control equations can be greatly reduced. Finally， taking the K-type steel derrick structure as a numerical example， the results show that the method has great recognition effects for different damage locations and degrees and can be used for damage diagnosis or health monitoring of other large structures.