We develop a relativistic model for incoherent η-photoproduction on nuclei. The elementary process is described using an effective Lagrangian containing photons, nucleons, the S 11 (1535) and D 13 (1520) nucleon resonances, and ρ, ω, and η mesons. The nucleon and η wavefunctions are obtained from relativistic wave equations. Final-state interactions of the outgoing particles are included via optical potentials. The effects of these interactions are found to be large and lead to reduced cross sections.The incoherent cross sections for isovector transitions are much larger than those for isoscalar ones. The dominant contributions are those from the S 11 and D 13 resonances. We find important interference effects between the contributions of these two resonances. We give some detailed calculations for the cross sections for incoherent η-photoproduction on 12 C. We find that the incoherent cross section for a subset of states in the excitation energy region below 17 MeV are significantly larger than those of the coherent process. These cross sections may thus be accessible experimentally.