The extensive use of light weight composite materials in spacecrafts is challenged by the risk of damage initiation and propagation within their most critical structural components during service life. The durability and reliability of composite structures under such service conditions need serious attention. Elastically deployable composite booms are widely used for satellite, space antennas and solar sails. Matrix cracks are considered to be a primary form of damage caused by flattening and wrapping the boom around the circular hub prior to launching the component into space. However, while on orbit, most damages are induced by the environmental effects of ultraviolet radiation, thermal shifts from ±200 °C, vacuum and proton and electron radiation to the polymers. A well-developed Structural Health Monitoring (SHM) system tasked with monitoring structural degradation will provide information for the dynamic control of the satellite and the condition of deployable mechanisms on the space vehicle. In this paper, a novel SHM methodology based on system identification techniques is presented to identify the damage in laminated composite booms. Non-Destructive Evaluation (NDE) techniques, frequency response analysis and Auto- Regressive with eXogenous (ARX) input models are used to approximate the transfer functions between input and output sensing signals. Structural degradation is identified by examining the change of transfer functions at different damage states. A single-input-singleoutput (SISO) approach is adopted in this paper. System identification techniques allow characterizing of structural degradation without the need for acquiring excessive training data. The proposed methodology is verified through experimentation where damage is gradually induced by flattening and wrapping deployable boom samples around a circular hub.