A displacement measurement provides useful information for structural health monitoring (SHM) as it is directly related to stiffness of the structure. Most existing methods of direct measurement such as the Laser Doppler Vibrometer (LDV) and the Liner Variable Differential Transformer (LVDT) are known to have accurate performance but have difficulties particularly in the use of large-scale civil structures as the methods rely on fixed reference points. Alternatively, indirect methods have been developed and widely used methods are Global Positioning System (GPS), vision-based displacement measurement system and displacement estimation from acceleration record. Among the indirect method, the use of accelerometer provides simple and economical in term of both hardware installation and operation. The major problem using acceleration based displacement estimation is low frequency drift caused by double integration. Recently, dynamic displacement estimation algorithm that addresses low-frequency drift problem has been developed. This study utilizes Wireless Smart Sensor (WSN) for estimating dynamic displacement from acceleration measurement in combination with the recently developed displacement estimation algorithm. Integrated into WSN that are low-cost, wireless, compatible with accelerometers, and capable of onboard computation, the displacement can be measured without limit of location on large-scale civil structures. Thus, this approach has the significant potential to impact many applications that require displacement measurements. With the displacement estimation algorithm embedded, the WSN performs in-network data processing to estimate displacements at each distributed sensor location wirelessly using only measured acceleration data. To experimentally validate the performance of displacement estimation using WSN for the use in structures with multiple- degree of freedom, the random vibration test is conducted on the three-story shear building model. The estimated displacement is compared with the reference displacements measured from the laser displacement sensor and the result shows good agreement.