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Faculty in the College of Engineering at the University of Alabama developed a multidisciplinary course in applied spectral analysis that was first offered in 1996. The course is aimed at juniors majoring in electrical, mechanical, industrial, or aerospace engineering. No background in signal processing or Fourier analysis is assumed; the requisite fundamentals are covered early in the course and followed by a series of laboratories in which the fundamental concepts are applied. In this paper, a laboratory module on fault detection in rolling element bearings is presented. This module is one of two laboratory modules focusing on machine condition monitoring applications that were developed for this course. Background on the basic operational characteristics of rolling element bearings is presented, and formulas given for the calculation of the characteristic fault frequencies. The shortcomings of conventional vibration spectral analysis for the detection of bearing faults is examined in the context of a synthetic vibration signal that students generate in MATLAB. This signal shares several key features of vibration signatures measured on bearing housings. Envelope analysis and the connection between bearing fault signatures and amplitude modulation/demodulation is explained. Finally, a graphically driven software utility (a set of MATLAB m-files) is introduced. This software allows students to explore envelope analysis using measured data or the synthetic signal that they generated. The software utility and the material presented in this paper constitute an instructional module on bearing fault detection that can be used as a stand-alone tutorial or incorporated into a course.