Background and aims We studied damage accrual and factors determining development and progression of damage in an international cohort of systemic lupus erythematosus (SLE) patients. Methods The Systemic Lupus International Collaborating Clinics (SLICC) Inception Cohort recruited patients within 15 months of developing four or more 1997 American College of Rheumatology (ACR) criteria for SLE; the SLICC/ACR damage index (SDI) was measured annually. We assessed relative rates of transition using maximum likelihood estimation in a multistate model. The Kaplan-Meier method estimated the probabilities for time to first increase in SDI score and Cox regression analysis was used to assess mortality. Results We recruited 1722 patients; mean (SD) age 35.0 (13.4) years at cohort entry. Patients with damage at enrolment were more likely to have further worsening of SDI (SDI 0 vs ≥1; p < 0.001). Age, USA African race/ethnicity, SLEDAI-2K score, steroid use and hypertension were associated with transition from no damage to damage, and increase(s) in pre-existing damage. Male gender (relative transition rates (95% CI) 1.48 (1.06 to 2.08)) and USA Caucasian race/ethnicity (1.63 (1.08 to 2.47)) were associated with SDI 0 to ≥1 transitions; Asian race/ethnicity patients had lower rates of new damage (0.60 (0.39 to 0.93)). Antimalarial use was associated with lower rates of increases in pre-existing damage (0.63 (0.44 to 0.89)). Damage was associated with future mortality (HR (95% CI) 1.46 (1.18 to 1.81) per SDI point). Conclusions Damage in SLE predicts future damage accrual and mortality. We identified several potentially modifiable risk factors for damage accrual; an integrated strategy to address these may improve long-term outcomes.