The effects of ε martensite content and strain amplitude on damping capacity of an Fe-17%Mn alloy have been studied to establish damping mechanism of Fe-Mn system corresponding to the magnitude of strain amplitude. In a range of 1×10^(-4)∼3×10^(-4) strain amplitude, the damping capacity is linearly proportional to the ε martensite content, which suggests that stacking faults and ε martensite variant boundaries are the principal damping sources. In the range of 4×10^(-4)∼6×10^(-4) strain amplitude, however, a maximum damping capacity is observed around 68 vol% ε. This behavior is very similar to dependence of relative area of γ/ε interface on ε martensite content. This means that in this strain range, γ/ε interface acts as damping source in addition to the stacking faults and variant boundaries in Fe-17%Mn alloy.