This paper proposes a fault-detection system for faulty induction motors (bearing faults, interturn shorts, and broken rotor bars) based on multiresolution analysis (MRA), correlation and fitness values-based feature selection (CFFS), and artificial neural network (ANN). First, this study compares two feature-extraction methods: the MRA and the Hilbert Huang transform (HHT) for induction-motor-current signature analysis. Furthermore, feature-selection methods are compared to reduce the number of features and maintain the best accuracy of the detection system to lower operating costs. Finally, the proposed detection system is tested with additive white Gaussian noise, and the signal-processing method and feature-selection method with good performance are selected to establish the best detection system. According to the results, features extracted from MRA can achieve better performance than HHT using CFFS and ANN. In the proposed detection system, CFFS significantly reduces the operation cost (95% of the number of features) and maintains 93% accuracy using ANN.