The resistance to forming microcracks is a key factor for bone to withstand critical loads without fracturing. In this study, we investigated the initiation and propagation of microcracks in murine cortical bone by combining three-dimensional images from synchrotron radiation-based computed tomography and time-lapsed biomechanical testing to observe microdamage accumulation over time. Furthermore, a novel deformable image registration procedure utilizing digital volume correlation and demons image registration was introduced to compute 3D strain maps allowing characterization of the mechanical environment of the microcracks. The displacement and strain maps were validated in a priori tests. At an image resolution of 740 nm the spatial resolution of the strain maps was 10 μm (MTF), while the errors of the displacements and strains were 130 nm and 0.013, respectively. The strain maps revealed a complex interaction of the propagating microcracks with the bone microstructure. In particular, we could show that osteocyte lacunae play a dual role as stress concentrating features reducing bone strength, while at the same time contributing to the bone toughness by blunting the crack tip. We conclude that time-lapsed biomechanical imaging in combination with three-dimensional strain mapping is suitable for the investigation of crack initiation and propagation in many porous materials under various loading scenarios.