Fatigue-induced damage accumulation was investigated in a third generation titanium aluminide alloy both at room temperature and at a temperature of 700 °C promoting oxidation. The digital image correlation technique was utilized for monitoring the evolution of local strain fields with cyclic deformation at both temperatures. With the aid of a newly adopted surface patterning technique, digital image correlation successfully detected the crack initiation sites prior to the actual formation of the cracks. Despite the oxidation at elevated temperatures, digital image correlation could detect the crack initiation sites at the early stages of the cyclic deformation, laying out the potential of this technique for monitoring the damage evolution in various metallic materials under severe service conditions.