A procedure is developed that evaluates the energy dissipated from a material subject to cyclic loading and enables identification of the difference in material microstructure. It is demonstrated that the dissipated energy can be derived from specimens loaded in the elastic region using temperature measurements obtained by infrared thermography. To obtain accurate values of the small temperature changes resulting from the intrinsic dissipation below the yield point, a key part of the procedure is to eliminate the effect of external heat sources and sinks from the vicinity of the test specimen under investigation. To this end, a chamber was designed to minimise the external radiation whilst allowing the specimens to be cyclically loaded; the configuration of the chamber is described, alongside its integration into the procedure. A reference specimen was specifically introduced in the chamber to take into account the thermal exchanges between the specimen and the chamber environment. A data processing procedure, based on the thermomechanical heat diffusion equation, is applied to enable the dissipated energy to be derived from the temperature measurements. It is established that quantifying the amount of energy dissipation provides an opportunity to identify the material condition. The procedure is demonstrated on specimens made from 316L stainless steel containing a range of microstructures produced by different heat treatments. It is shown that the dissipative energy is dependent on the microstructure and that the dissipative source can be identified using the experimental procedure.