The capability of third harmonic generation to indicate material degradation at the microstructural level is demonstrated for strain ratcheting in Alloy 617. Specifically, mechanical experiments on Alloy 617 having constant axial stress and shear strain controlled cycling were conducted to failure and damage fractions of 0.58 and 0.71 based on the total axial strain. The tubular specimens were then nondestructively tested using magnetostrictive transducers to send and receive finite amplitude torsional guided waves. These primary waves generated third harmonics that are sensitive to the microstructural state. These results demonstrate the potential of nonlinear ultrasonics for early detection of degradation, which is needed for life cycle management based on condition-based maintenance.