ABSTRACTThin plate and shell structures are extensively used in aerospace, naval, and energy sectors due to their lightweight and efficient load‐bearing properties. Structural Health Monitoring (SHM) implementations are becoming increasingly important in these industries to reduce maintenance costs, improve reliability, and ensure safe operations. This study presents an efficient triangular inverse shell element for thin shell structures, developed using discrete Kirchhoff assumptions within the inverse finite element method (iFEM) framework. The proposed inverse formulation is efficient and requires fewer strain sensors to achieve accurate and reliable displacement field reconstruction than existing inverse elements based on the First Order Shear Deformation Theory (FSDT). These features are critical to iFEM‐based SHM strategies for improving real‐time efficiency while reducing project costs. The inverse element is rigorously validated using benchmark problems under in‐plane, out‐of‐plane, and general loading conditions. Also, its performance is compared to an existing competitive inverse shell element based on FSDT. The inverse formulation is further evaluated for robust shape‐sensing capability, considering a real‐world structural configuration under a practicable sparse sensor arrangement. Additional investigation includes defect characterization and structural health assessment using damage index criteria. This research contributes toward developing more reliable and cost‐effective monitoring solutions by highlighting the potential application of the proposed inverse element for SHM frameworks designed for thin shell structures.