This work examines the effect of stress state on the nucleation and growth of damage during hot deformation of free cutting steel. A test-piece was designed to emulate stress states similar to those found in hot rolling. The novelty of the new design is its ability to maintain a constant spatial stress state during deformation, allowing a true correlation of the damage mechanism to the stress triaxiality; previous sample geometries had a large variation in stress during plastic deformation, which made it impossible to relate an observed damage mechanism to a particular stress state using a single sample. Continuum damage equations were calibrated using uniaxial tensile tests and implemented into finite element models of compressive test-pieces. The stress distributions in each test-piece geometry were compared and a single test-piece design was chosen with an optimised triaxial stress distribution. The test-piece was deformed at elevated temperatures, sectioned and the microstructure was evaluated. The combination of stress state and strain computed via finite element analysis was compared to the damage produced across the test-piece section. The predictions of the damage equations were compared to the results of physical tests and used to identify appropriate damage models. The effect of stress state on damage was evaluated, which can be used to update and improve existing material models. The stress triaxiality was found to be the dominant factor for damage around inclusions, with a minimum stress triaxiality required for damage growth to occur.