Online condition monitoring technique helps to detect the root cause of failure of any machine. The present article describes a design of the online failure monitoring facility for mechanical face seals. The experimental test facility is to operate the seal (i.e., carbon-graphite) in real conditions of fluid pressure, temperature, and misalignment, which occur in an industrial environment. The developed test setup consists of two proximity displacement sensors (accuracy 2 μm), one fiber-optic sensor (accuracy 10 μm), one accelerometer (3.97 mV/ms-2), and one non-contact torque sensor (accuracy 0.05 N.m). To validate the test facility, a typical conical carbon graphite (C = 59.195%, O = 4.625%, and Sb = 36.18%.) mechanical face seal (outer dia = 82 mm and inner dia = 63 mm) for a rotary joint used in steam/hot water was selected. The root cause of failure of such seals has been identified. Finally, recommendations have been made that provide some assistance to design the mechanical face seal.