The task of condition monitoring and fault diagnosis of rolling element bearing is often cumbersome and labour intensive. Various techniques have been proposed for rolling bearing fault detection and diagnosis. The challenge however, is to efficiently and accurately extract features from signals acquired from these elements, particularly in the time–frequency domain. A new time–frequency technique, known as basis pursuit, was recently developed. This paper presents an application of this new basis pursuit method in the extraction of features from signals collected from faulty rolling bearings with inner race and outer race faults. Results obtained using this new technique were compared with discrete wavelet packet analysis (DWPA) and the matching pursuit technique. Basis pursuit represents features with very fine resolution and sparsity in the time–frequency domain thus rendering easier interpretation of the analysed results. The technique also improves the signal to noise ratio so that subsequent fault detection and identification can be conducted with confidence.