such as carbon nanotubes, graphene membranes or superconducting resonators, the origin of nonlinear damping is sometimes unclear. This presents a problem, as the damping rate is a key figure of merit in the application of these systems to extremely precise sensors or quantum computers. Through measurements of a superconducting circuit, we show that nonlinear damping can emerge as a direct consequence of quantum fluctuations and the conservative nonlinearity of a Josephson junction. The phenomenon can be understood and visualized through the flow of quasi-probability in phase space, and accurately describes our experimental observations. Crucially, the effect is not restricted to superconducting circuits: we expect that quantum fluctuations or other sources of noise give rise to nonlinear damping in other systems with a similar conservative nonlinearity, such as nano-mechanical oscillators or even macroscopic systems.