The balance between local remodeling and accumulation of trabecular bone microdamage is believed to play an important role in the maintenance of skeletal integrity. However, the local mechanical parameters associated with microdamage initiation are not well understood. Using histological damage labeling, micro-CT imaging, and image-based finite element analysis, regions of trabecular bone microdamage were detected and registered to estimated microstructural von Mises effective stresses and strains, maximum principal stresses and strains, and strain energy density (SED). Bovine tibial trabecular bone cores underwent a stepwise uniaxial compression routine in which specimens were micro-CT imaged following each compression step. The results indicate that the mode of trabecular failure observed by micro-CT imaging agreed well with the polarity and distribution of stresses within an individual trabecula. Analysis of on-axis subsections within specimens provided significant positive relationships between microdamage and each estimated tissue stress, strain and SED parameter. In a more localized analysis, individual microdamaged and undamaged trabeculae were extracted from specimens loaded within the elastic region and to the apparent yield point. As expected, damaged trabeculae in both groups possessed significantly higher local stresses and strains than undamaged trabeculae. The results also indicated that microdamage initiation occurred prior to apparent yield at local principal stresses in the range of 88–121 MPa for compression and 35–43 MPa for tension and local principal strains of 0.46–0.63% in compression and 0.18–0.24% in tension. These data provide an important step towards understanding factors contributing to microdamage initiation and establishing local failure criteria for normal and diseased trabecular bone.