Fatigue cracks on steel components may have strong consequences on the structure's serviceability and strength. Their detection and localization is a difficult task. Existing technologies enabling structural health monitoring have a complex link signal-to-damage or have economic barriers impeding large-scale deployment. A solution is to develop sensing methods that are inexpensive, scalable, with signals that can directly relate to damage. The authors have recently proposed a smart sensing skin for structural health monitoring applications to mesosystems. The sensor is a thin film soft elastomeric capacitor (SEC) that transduces strain into a measurable change in capacitance. Arranged in a network configuration, the SEC would have the capacity to detect and localize damage by detecting local deformation over a global surface, analogous to biological skin. In this paper, the performance of the SEC at detecting and localizing fatigue cracks in steel structures is investigated. Fatigue cracks are induced in steel specimens equipped with SECs, and data measured continuously. Test results show that the fatigue crack can be detected at an early stage. The smallest detectable crack length and width are 27.2 and 0.254 mm, respectively, and the average detectable crack length and width are 29.8 and 0.432 mm, respectively. Results also show that, when used in a network configuration, only the sensor located over the formed fatigue crack detect the damage, thus validating the capacity of the SEC at damage localization.