Reliable early-stage damage detection requires continuous monitoring over large areas of structure, and with sensors of high spatial resolution. Technologies based on Large Area Electronics (LAE) can enable direct sensing and can be scaled to the level required for Structural Health Monitoring (SHM) of civil structures and infrastructure. Sensing sheets based on LAE contain dense arrangements of thin-film strain sensors, associated electronics and various control circuits deposited and integrated on a flexible polyimide substrate that can cover large areas of structures. This paper presents the development stage of a prototype strain sensing sheet based on LAE for crack detection and localization. Two types of sensing-sheet arrangements with size 6 × 6 inch (152 × 152 mm) were designed and manufactured, one with a very dense arrangement of sensors and the other with a less dense arrangement of sensors. The sensing sheets were bonded to steel plates, which had a notch on the boundary, so the fatigue cracks could be generated under cyclic loading. The sensors within the sensing sheet that were close to the notch tip successfully detected the initialization of fatigue crack and localized the damage on the plate. The sensors that were away from the crack successfully detected the propagation of fatigue cracks based on the time history of the measured strain. The results of the tests have validated the general principles of the proposed sensing sheets for crack detection and identified advantages and challenges of the two tested designs.