The microstructure evolution and damage development of the third-generation Al–Li alloy 2060 (T8) were studied using in situ bending tests. Specimens were loaded with a series of punches of different radii, and the microstructure evolution was studied by scanning electron microscopy, electron backscatter diffraction, and digital image correlation (DIC) methods. The evolution of the microscopic fracture strain distribution and microstructure in 2060 alloy during bending was characterized, where the dispersion distribution of precipitates was recorded by backscattered electron imaging and later inputted into a DIC system for strain calculations. The experimental results showed that strain localization in the free surface of bent specimens induced damage to the microstructure. The region of crack initiation lies on the free surface with maximum strain, and the shear crack propagates along the macro-shear band in the early stages of bending. Crack propagation in the later stages was interpreted on the basis of the conventional mechanism of ductile fracture.