Abstract: The present invention relates to nonlinear Vibro-Acoustic Modulation (VAM), one of the prevailing nonlinear methods for material characterization and structural damage evaluation. An algorithm of AM/FM separation is presented specifically for VAM method. While the commonly used Hilbert transform (HT) separation may not work for a typical VAM scenario, the developed IQHS and SPHS algorithms address HT shortcomings. They have been tested both numerically and experimentally (for fatigue cracks evolution) showing FM dominance at the initial micro-crack growth stages and transition to AM during macro-crack formation. In addition, the SPHS algorithm is capable of detecting fatigue crack via monitoring of modulation phase.