Irreversible or plastic deformation in bone is associated with both permanent plastic strain as well as localized microdamage. Whereas mechanisms at the molecular and mesoscopic level have been proposed to explain aspects of irreversible deformation, a quantitative correlation of mechanical yielding, microstructural deformation, and macroscopic plastic strain does not exist. To address this issue, we developed and applied a two-dimensional image correlation technique to the tensile deformation of bovine fibrolamellar bone, to determine the spatial distribution of strain fields at the length scale of 10 μm to 1 mm in bone during irreversible tensile deformation. We find that tensile deformation is relatively homogeneous in the elastic regime and starts at the yield point, showing regions of locally higher strain. Multiple regions of high deformation can exist at the same time over a length scale of 1 to 10 mm. Macroscopic fracture always occurs at one of the locally highly deformed regions, but the selection of which region cannot be predicted. Locally, strain rates can be enhanced by a factor of 3 to 10 over global strain rates in the highly deformed zones and are lower but always positive in all other regions. Light microscopic imaging shows the onset of structural “banding” in the regions of high deformation, which is most likely correlated to microstructural damage at the inter- and intrafibrillar level.