Motors have become critical components for many industries. A motor failure can result in the shutdown of a production line, or require that redundant equipment be utilised to circumvent the problem. By this way, the early detection of motor deterioration can increase plant availability and safety in an economical way. Many publications [1-6] have investigated the detection of rotor and stator winding failures in electrical machines; however, there is more limited research on fault diagnosis in induction motors fed by PWM converters [7-9]. This paper proposes a method, based on spectral estimation to diagnosis stator winding faults in induction motors fed by PWM converters. Simulation and experimental results are employed to validate the method. Further, a 5 Hp and 3 Hp, 230V induction motors with internal tapings from the stator windings are specially constructed. The motor are powered by a PWM converter and different fault conditions are investigated.