Sintered powder metals play increasingly important role in industry. The most remarkable mechanical characteristics of the sintered material is the high porosity, which characterizes deformations and failure of the material. It is confirmed additionally that manufacturing process affects mechanical behavior and fatigue performance of the material. In the present work a continuum damage mechanics model is used to describe the damage evolution in machined sintered iron. It is confirmed that machining effects are localized in the sub-surface layer of the mechanical part, and the damage can be quantitatively described by the damage model. The experimental results from the fabricated specimen have to be separated into mechanical behavior of the sub-surface layer and the specimen core. The damage model provides an effective way to describe mechanical performance of a machined part of the sintered iron.