An innovative method for investigation of deformation-induced damage of elastic-plastic materials is proposed. A static tension test, performed on a specimen with a variable cross-section gage part enabled analysis of degradation of the material structure for all stages of permanent deformation. Modified Johnson model has been used to quantify damage. Analysis of the damage of the specimen surface as well as observations of the damage induced inside the gage part of the specimen has been performed using SEM observations. Debonding at the interface between a hard inclusion and a ductile matrix has been found to be responsible for initiation of cracks on the specimen surface as well as inside the gage part of the specimen. Analysis of the subsequent void growth has been performed. Surface cracks are associated with plastic deformation resulting in an increase of the surface roughness. Variations of the specimen surface roughness have been found to be in good correlation with the damage parameter. This correlation enables the use of surface roughness as the relative damage indicator for the investigated material and deformation mode.