A major goal in the intelligent control of complex mechanical systems such as advanced aircraft, spacecraft, and power plants is to achieve high performance with increased reliability, availability, component durability, and maintainability. The current state-of-the-art in control systems synthesis focuses on improving performance and diagnostic capabilities under constraints that often do not adequately represent the dynamic properties of the materials. The reason is that the traditional design is based upon the assumption of conventional materials with invariant characteristics. In view of high performance requirements and availability of improved materials, the lack of appropriate knowledge about the properties of these materials will lead to either less than achievable performance due to overly conservative design, or over-straining of the structure leading to unexpected failures and drastic reduction of the service life. The key idea of the research reported in this paper is that a significant improvement in service life could be achieved by a small reduction in the system dynamic performance. The concept of damage mitigation is introduced and a continuous-time model of fatigue damage dynamics is formulated in this paper, and the results of simulation experiments are presented for transient operations of a reusable rocket engine.