Most lightning strikes cause damage through the large current flowing in the return stroke or through the heat that is generated by this and the continuing current. The precise mechanisms whereby lightning currents cause damage are not completely understood, however. If lightning strikes a person, the stroke current can damage the central nervous system, heart, lungs, and other vital organs (see electrical shock).

When a building or power line is struck by lightning or is exposed to the intense electromagnetic fields from a nearby flash, the currents and voltages that appear on the structure are determined both by the currents and fields in the discharge and by the electrical response of the object and its grounding system. For instance, if a lightning surge enters an unprotected residence by way of an electric power line, the voltages may be large enough to cause sparks in the house wiring or appliances. When such flashovers occur, they may short-circuit the alternating current power system, and the resulting power arc may start a fire. In such instances, the lightning does not start the fire directly, but it does cause a power fault (short circuit), and then the power currents do the damage. In the case of metals, large currents heat the surface at the air-arc interface and the interior by electron collisions with the metal lattice. If this heat is also great enough, the metal will melt or evaporate.

At least three properties of the return-stroke current can cause damage; these are the peak current, the maximum rate of change of the initial current, and the total amount of charge transferred. For objects that have a resistive impedance, such as a ground rod or a long power line, the peak voltage during a strike is proportional to the peak current produced of the lightning stroke and the resistivity of the struck object. For example, if a 100,000 ampere peak current flows into a 10-ohm grounding system, 1 million volts will be produced. A common hazard associated with the large voltages produced by lightning strikes is the re-direction of some of the energy (that is, a flashover) from the original target to an adjacent object. Such secondary discharges, or side-flashes, often cause damage comparable to that of a direct strike, and they are one of the main hazards of standing under or near an isolated tree (or any other tall object) during a thunderstorm. Such large voltages frequently cause secondary discharges or side-flashes to radiate outward from the object that is struck to another object nearby. One form of a side-flash can even occur in the ground near the point of lightning attachment.

For objects that have an inductive electrical impedance, such as the wires in a home electrical system, the peak voltage will be proportional to the maximum rate of change of the lightning current and the inductance of the object. For example, one metre of straight copper wire has a self-inductance on the order of one microhenry. The peak rate of change in the lightning current in a return stroke is on the order of 100,000 amperes per microsecond; therefore, about 100,000 volts will appear across this length of conductor for the duration of the change, typically 100 nanoseconds (billionths of a second).

The heating and subsequent burn-through of metal sheets, as on a metal roof or tank, are to a first approximation proportional to the total charge injected into the metal at the air-arc interface. Generally, large charge transfers are produced by long-duration continuing currents that are in the range of 100 to 1,000 amperes, rather than by the peak currents, which have a relatively short duration. The heat produced by long continuing currents is frequently the cause of forest fires. A typical cloud-to-ground flash transfers 20 to 30 coulombs of charge to the ground, and extreme flashes transfer hundreds and occasionally thousands of coulombs.