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The purpose of this research is to identify single-point defects in rolling element bearings. These defects produce characteristic fault frequencies that appear in the machine vibration and tend to modulate the machine's frequencies of mechanical resonance. An amplitude modulation (AM) detector is developed to identify these interactions and detect the bearing fault while it is still in an incipient stage of development (i.e., to detect the instances of AM when the magnitude of the characteristic fault frequency itself is not significant). Use of this detector only requires machine vibration from one sensor and knowledge of the bearing characteristic fault frequencies. Computer simulations as well as machine vibration data from bearings containing outer race faults are used to confirm the proficiency of this proposed technique.