This study aims at investigating the nonlinear dynamic behavior of rotating blade with transverse crack. A novel nonlinear rotating cracked blade model (NRCBM), which contains the spinning softening, centrifugal stiffening, Coriolis force, and crack closing effects, is developed based on continuous beam theory and strain energy release rate method. The rotating blade is considered as a cantilever beam fixed on the rigid hub with high rotating speed, and the crack is deemed to be open and close continuously in a trigonometric function way with the blade vibration. It is verified by the comparison with a finite element-based contact crack model and bilinear model that the proposed NRCBM can well capture the dynamic characteristics of the rotating blade with breathing crack. The dynamic behavior of rotating cracked blade is then investigated with NRCBM, and the nonlinear damage indicator (NDI) is introduced to characterize the nonlinearity caused by blade crack. The results show that NDI is a distinguishable indicator for the severity level estimation of the crack in rotating blade. It is found that severe crack (i.e., a closer crack position to blade root as well as larger crack depth) is expected to heavily reduce the stiffness of rotating blade and apparently result in a lower resonant frequency. Meanwhile, the super-harmonic resonances are verified to be distinguishable indicators for diagnosing the crack existence, and the third-order super-harmonic resonances can serve as an indicator for the presence of severe crack since it only distinctly appears when the crack is severe.