This document proposes using wavelet analysis to detect and identify switch faults in a diode-clamped multilevel inverter feeding an induction motor drive. A wavelet-based multi-resolution analysis is used to analyze voltage and current signals from the system under normal and faulty conditions. Signatures extracted from the wavelet analysis at different resolution levels can be used to develop a feature vector to discriminate between healthy and faulty systems, and identify the type of fault. The analysis is able to detect switch shorts, opens, increased load, and line-to-line faults based on variations in the wavelet transform details of signals like phase voltage, line current, and switch voltages.