The present invention relates to composite materials exhibiting passive domain-wall activated damping, methods for using passive domain-wall activated damping, and processes for producing materials that exhibit passive domain-wall activated damping. One typical embodiment uses a polymer matrix phase and a dispersed particulate phase that exhibits domain wall motion under an applied mechanical load. Materials that exhibit domain wall motion under an applied mechanical load include magnetostrictive, piezoelectric and electrostrictive materials. One specific embodiment used Terfenol-D as the damping phase, aligned by magnetization during curing in a polymer matrix. Other specific embodiments employed PZT-5H and PMN-PT as the damping phase.