Incipient Failure Detection (IFD) is a new technique for detecting the presence and monitoring the progression of faults in rotating machinery. IFD uses inexpensive sensors and does not require custom baseline data. Its operation is explained and some typical test results are presented. Incipient failure detection is a specialized form of high-frequency vibration analysis. The basic premise of IFD is that dynamic events related to defects in rotating machinery will cause vibration amplitude modulations in the time domain across a broad frequency spectrum. A bandpass filter can monitor amplitude variations of a narrow band of energy at a low-noise carrier frequency while screening out energy variations in the rest of the frequency spectrum. Spectrum analysis of the envelope-detected signal will show a strong peak at the defect frequency but a relatively flat response at all other frequencies.