In this study, damage localization of frame structures from seismic acceleration responses is explored using the DLV technique and ARX model for system identification. The concept of the DLV method is to identify the members with zero stress under some specific loading patterns derived by interrogating the changes in flexibility matrix of the structure before and after the damage state. Success of the DLV method for damage localization lies on the ability to identify the flexibility matrix. The ARX model, a discrete-time non-parametric auto-regressive system identification technique is adopted to identify the modal parameters (natural frequencies, transfer functions and mode shapes) from which the flexibility matrices of the intact and damaged structures are constructed. To explore the effectiveness of the DLV method, a five-storey steel model frame with diagonal bracings was considered for seismic shaking table tests. The damage conditions of the structure were simulated by partially removing some of the diagonals. With the flexibility matrices of both the intact and damaged structures synthesized on a truncated modal basis, the damage locations have been successfully identified by the DLV method for either single or multiple damage conditions, regardless of the damage locations. This study confirms the potential of the DLV method in the detection of local damages from global seismic response data for frame structures.