In this paper, the induction motor rotor fault diagnosis system using current signals, which are measured using axis-transformation method, and speed, which is estimated using current information, are presented. In inverter-fed motor drives unlike line-driven motor drives the stator currents have numerous harmonics components and therefore fault diagnosis using stator currents is very difficult. The current and speed signal for rotor fault diagnosis needs to be precise. Also, high resolution information, which means the diagnosis system, demands additional hardware such as low pass filter, high resolution ADC, encoder and etc. Therefore, the proposed axis-transformation and speed estimation method are expected to contribute to low cost fault diagnosis systems in inverter-fed motor drives without the need for an encoder and any additional hardware. In order to confirm validity of the developed algorithms, various experiments for rotor faults are tested and the line current spectrum of each faulty situation using Park transformation and speed estimation method are compared with the results obtained from fast Fourier transforms.