Diaphragm couplings are prone to developing diaphragm cracks under prolonged high-speed operating conditions, which can lead to degradation in the performance of the transmission system and affect the dynamics of the shafting system. To investigate the effects of diaphragm cracks on the dynamics of couplings and the shafting system, a finite element model of a diaphragm coupling with a crack failure is established using ANSYS finite element software to analyze the time-varying characteristics of the diaphragm coupling’s angular and radial stiffness. A shaft dynamics model of the diaphragm coupling with a crack is developed using Timoshenko beam elements to analyze the impact of different crack lengths and locations on the dynamics of the shafting system. The validity of the dynamic model for a diaphragm coupling with a crack is verified through a constant speed experiment conducted on a rotor test bench. The results indicate that diaphragm crack failure causes a change in the periodicity of the time-varying stiffness of the diaphragm coupling, leading to a distinct 2× component appearing in the frequency domain of the transmission shaft system.