Subsurface damage in composite materials is difficult to detect using visual techniques, and other current inspection methods lack the ability to perform quick, wide-area inspections without the need for reference signatures or baseline measurements. This paper presents a method for detecting and locating subsurface damage in composite materials without historical reference measurements by considering the nonlinear behavior of the material in the vicinity of damage. Nonlinear behavior is identified by comparing frequency response functions measured at different input amplitudes. It will be shown that the nonlinear behavior of the material is most evident in the areas nearest to the damage. The proposed inspection method is demonstrated both analytically and experimentally. First, a finite element model of a sandwich beam is developed using Bernoulli–Euler beam elements to represent each layer of the beam and springs to represent the interface between the layers. A bilinear stiffness nonlinearity is simulated to represent disbond damage between the top and core layers of the beam. The simulated disbond damage is localized by identifying degrees of freedom which indicate significant nonlinear response through a comparison of frequency response functions measured at various input amplitudes. Next, the method is demonstrated experimentally by identifying disbond damage in a fiberglass sandwich panel. A three-dimensional scanning laser vibrometer is used to measure the forced frequency response of the panel in its damaged state as it is excited at two or more amplitudes of excitation by a piezoelectric actuator. Comparisons of the frequency response functions measured at different input amplitudes show that the subsurface damage introduces nonlinear behavior which resembles a bilinear stiffness nonlinearity, and the differences in the frequency response functions are largest in the vicinity of the damage location. In addition, it was found that improved localization of the damage is achieved by investigating the response at higher frequencies. This work has application as a nondestructive method for detecting and locating subsurface damage in composite materials and, by using a laser vibrometer for noncontact measurement, allows for quick, wide-area inspection of composite materials without the need for reference signatures or baseline measurements.