Introduction. This work presents a methodology for detecting inter-turn short circuit (ITSC) and broken rotor bars (BRB) fault in variable speed induction machine controlled by field oriented control. If any of these faults are not detected at an early stage, it may cause an unexpected shutdown of the industrial processes and significant financial losses. Purpose. For these reasons, it is important to develop a new diagnostic system to detect in a precautionary way the ITSC and BRB at various load condition. We propose the application of discrete wavelet transform to overcome the limitation of traditional technique for no-stationary signals. The novelty of the work consists in developing a diagnosis system that combines the advantages of both the discrete wavelet transform (DWT) and artificial neural network (ANN) to identify and diagnose defects, related to both ITSC and BRB faults. Methods. The suggested method involves analyzing the electromagnetic torque signal using DWT to calculate the stored energy at each level of decomposition. Then, this energy is applied to train neural network classifier. The accuracy of ANN based on DWT, was improved by testing different orthogonal wavelet functions on simulated signal. The selection process identified 5 pertinent wavelet energies, concluding that, Daubechies44 (db44) is the best suitable mother wavelet function for effectively detecting and classifying failures in machines. Results. We applied numerical simulations by MATLAB/Simulink software to demonstrate the validity of the suggested techniques in a closed loop induction motor drive. The obtained results prove that this method can identify and classify these types of faults under various loads of the machine. References 31, table 1, figures 9.