Fe–Mn alloys have been widely applied to industrial facilities because of their good mechanical properties, high damping capacity at great strain amplitude and low cost. However, the damping mechanism of Fe–Mn alloys is not fully clear now. In this paper, the high damping mechanism of a Fe–Mn alloy and its effect of pre–deformation on damping capacity were studied by using G–L dislocation model and measuring stacking fault probability. The damping capacity was measured using reversal torsion pendulum. The stacking fault probability and volume fraction of  ε–martensite were determined by XRD and the microstructure was observed by SEM and TEM. The results show that the high damping mechanism can be described in terms of the breakaway movement of Shockley partial dislocations on stacking faults. Pre–deformation has little effect on the volume fraction of  ε–martensite, but it increases the stacking fault probability in γ–austenite and ε–martensite, so the damping capacity of Fe–Mn alloy is improved. With pre–deformation increasing (greater than 4%), however, the stacking faults and ε–martensite segment each other, so the breakaway movement of Shockley partial dislocations is difficult and the damping capacity of Fe–Mn alloy decreases gradually.