The piezoresistivity of carbon nanotube (CNT) reinforced nanocomposites is modeled using a multiscale damage modeling technique. Two phenomena of piezoresistivity are studied, the inherent piezoresistivity of the CNTs and the electrical tunneling effect. The damage model is developed under the framework of continuum damage mechanics (CDM) with a physical damage evolution equation inspired by Molecular Dynamics (MD) simulations. This damage model is applied to a nanocomposite unit cells with randomly dispersed CNTs. Orders of magnitude change in piezoresistivity is observed as the nanocomposite changes from non-damaged state to damaged state. This study provides insights into the prevailing mechanisms associated with piezoresistivity in the damaged and undamaged state of the CNT reinforced nanocomposites at the sub micro scale.