Damping capacity and mechanical properties were investigated with respect to the amount of cold rolling for an Fe-23%Mn alloy. Maximum damping capacity was observed around 10% reduction at strain amplitude range of 2×10^(-4)∼4×10^(-4). The internal stacking faults in ε martensite plates are considered the most important damping source in this strain range. However, the strain amplitude range of 5×10^(-4)_∼6×10^(-4) higher than that showed the maximum damping capacity around 2% reduction. This means that γ/ε interface is the principal damping source in this strain range. Hardness increased continuously with the amount of deformation. Especially, when deformed at the range of 10%∼20%, the hardness increased steeply due to the work hardening as well as the stress-induced martensitic transformation. Mechanical properties such as yield strength and tensile strength were increased with the increase of cold work, but elongation showed reverse tendency. The 10% cold rolling showed the best combination of damping capacity and tensile strength.