The multi-level inverter is widely used in high-power and high-voltage applications. Multi-level inverters use a large number of switches for high power conversion, resulting in increased system's fault probability. To ensure stable operation of the system, several fault diagnosis methods have been carried out by researchers. In this article, a fault diagnostic system in a multi-level inverter using wavelet modulus maxima is developed. The working situation of the power devices of a five-level diode-clamped multi-level inverter drive system under an open-circuit fault is analyzed through MATLAB (The MathWorks, Natick, Massachusetts, USA) simulation. The wavelet modulus maxima of output phase voltages are used to detect faulty phase (leg), and wavelet modulus maxima of DC bus currents are used to detect fault type and fault switch. Wavelet analysis is used for feature extraction, which can be used as input to the expert system to develop a fault identifier. The open-circuit fault on the five-level diode-clamped multi-level inverter of power devices is carried out experimentally. The experimental prototype is developed to validate the fault analysis with simulation results.