The aim of this work was to develop a more detailed understanding of loading conditions and damage phenomena near the edge of a punch used for cutting or blanking. A combined experimental and numerical approach was chosen for the investigation. For physical simulation of edge loading, a specific edge-loading test has been developed to study the material response of high-strength tool steels under loading conditions that are typical for the edges of punches. The edge-loading test allows us to investigate the damage evolution of a cutting edge in the laboratory. A special technique with a split specimen enables the investigation of the local deformation behavior and damage evolution in the interior of the cyclically loaded specimen. Two different high-strength tool steels have been investigated, a K340 ISODUR, produced by electroslag remelting technology and a powder metallurgically produced S390 MICROCLEAN. The two steels have different carbide types, carbide shapes, as well as primary carbide content. The region near the lateral surface of the specimen is subjected to heavy cyclic plastic deformation leading to a highly damaged zone. The critical zone for the damage evolution is a region at the boundary of the plastically deformed zone near the lateral surface. The different microstructures of the two steel types influence the crack initiation: In the K340 ISODUR large carbides fracture in the plastically deformed area of the specimen during the first loading cycle. In the S390 MICROCLEAN some small carbides fracture in the above mentioned critical zone during the first unloading cycle. Crack growth is promoted in both materials by the combination of inhomogeneous plastic deformation and the microstructural material inhomogeneity. The cracks appear only in the critical zone near the boundary of the plastic deformed zone. Accompanying Finite element simulations of the edge-loading test show that in this region the highest stress amplitude between the loaded and unloaded state and the highest tensile residual stresses after unloading occur. With the new edge-loading test, the failure mechanisms in tool steels under inhomogeneous, cyclic compressive loads similar to cutting tools can be systematically investigated.