The motor current signature provides an important source of the information for the faults diagnosis of three-phase induction motor. The theoretical principles behind the generation of unique signal characteristics, which are indicative of failure mechanisms, are Presented. The fault detection techniques that can be used to diagnose mechanical Problems, stator and rotor winding failure mechanisms, and air-gap eccentricity are described. A theoretical analysis is presented which predicts the presence of unique signature patterns in the current that are only characteristics of the fault. The predictions are verified by experimental results from a special fault Producing test rig and on-site tests in a steel company. And this study have made new diagnostic algorithm for the operating induction motors with the test results. These developments are including the use of monitoring and analysis of electric current to diagnose mechanical and electrical problems and gave the precise test results automatically.