In this paper, a hierarchical outlier detection approach is proposed for online distributed structural identification. In contrast to centralized identification, distributed identification extracts important features from the raw response data at the sensor nodes and transmits only them to the base station. Therefore, outlier detection is substantially more complicated than the traditional approach. In the proposed method, the local outliers in the raw data are detected directly at the corresponding sensor node, and they are excluded from further processing. However, if a sensor node is biased or exhibits other patterned outliers, these outliers will be undetectable at the sensor node level. It is necessary to conduct another level of outlier detection at the base station, namely, global outlier detection, before fusion. These two levels of outlier detection are of different nature. Local outlier detection concerns directly with the raw response data, whereas the targets of global outlier detection are the local estimation results of the stiffness parameters. Therefore, they require different mathematical tools. The proposed hierarchical outlier detection approach detects the local outliers according to the outlier probability of the data points at the sensor nodes, whereas it detects the global outliers according to the outlier probability of the local estimation results. By excluding both types of outliers, reliable online distributed structural identification can be achieved. Two examples are presented to demonstrate the proposed method.