The Damaged Anvil is the most worn-out variant of the Anvil, functioning the same as a regular Anvil but with significantly reduced durability. It appears after a Chipped Anvil takes further damage from use. A Damaged Anvil cannot be crafted but is obtained when a Chipped Anvil takes durability damage. Each time an Anvil is used, there is a 12% chance that it will take damage, progressing from a normal Anvil to a Chipped Anvil, then to a Damaged Anvil, and eventually breaking completely.

Like other anvils, a Damaged Anvil is used to repair items, rename tools and equipment, and combine enchantments. The experience cost for these actions depends on the item's previous modifications and enchantments. A Damaged Anvil follows gravity and will fall if the block beneath it is removed, dealing heavy damage to any entity it lands on. It can be mined with any tool, but pickaxes break it the fastest.