Earthquakes have underlined the need for health monitoring and safety assessment of engineering structures in general and especially historical heritage. These structures can be exposed to many different loads such as earthquake and wind that may cause the deterioration and loss of structural integrity. In this study, ambient vibration-based system identification of Zaganos Bastion is carried out for health assessment using linear and nonlinear analyses. 3D finite element analyses of the bastion are performed using relievo drawings and analytical dynamic characteristics are obtained. Ambient vibration tests are conducted on the bastion and experimental dynamic characteristics such as natural frequencies, mode shapes and damping ratios are determined. Enhanced Frequency Domain Decomposition Method in the frequency domain and Stochastic Subspace Identification Method in the time domain are used to extract the experimental dynamic characteristics. Maximum differences are minimized using some uncertain parameters to obtain the updated finite element model. Linear and nonlinear time history analyses are carried out using 1999 Kocaeli earthquake ground motion record to display the maximum displacements, stresses and local damage regions with detail. This study suggests that minor damage at the connection points and exterior surface will sustain under destructive earthquakes.