The objective of the research is to develop an adequate constitutive model and a suitable formulation which can be applied to the nonlinear structural analysis of simulating progressive damage growth commonly exhibited in heterogeneous materials. The concept of nonlocal continuum with local strain will be incorporated into the slanted-ellipse model. The localization instability and proper convergence in displacements, stresses, and energy will be verified by analyzing various typical members. The numerical efficiency and the effects of different numerical algorithms will be examined. The attempt of using boundary element method in the damage prediction of large-scale structures will also be studied.