Many industrial operations require continuous or nearly-continuous operation of machines, interruption of which can result in significant cost loss. The condition monitoring of these machines has received considerable attentions in recent years. Rapid developments in semiconductor, computing, and communication with a remote site have led to a new generation of sensor called "smart" sensors which are capable of wireless communication with a remote site. The purpose of this research is to develop a new type of smart sensor for on-line condition monitoring. This system is addressed to detect conditions that may lead to equipment failure when it is running. Moreover it will reduce condition monitoring expense using low cost MEMS accelerometer. This system is capable for signal preprocessing task and analog to digital converter which is controlled by CPU. This sensor communicates with a remote site PC using TCP/IP protocols. The developed sensor executes performance tests for data acquisition accuracy estimations.