An exhaustive study is undertaken to explore various time, frequency and time frequency domain parameters based on vibration data taken from a test rig to identify their effectiveness in rolling element bearing diagnostics. The damage identification parameters extracted after signal processing of vibration data are ranked in order of robustness, sensitivity and early detectivity. In order to better comprehend the defect propagation status in rolling element bearings, a holistic effect of all damage identification parameters need to be considered. Mahalanobis Taguchi System (MTS) is demonstrated as an effective tool to combine these parameters into a single damage identification parameter to track health of rolling element bearing. The Mahalanobis distance is found to be very sensitive and effective parameter that can be used for bearing fault diagnosis. © (2012) by the Katholieke Universiteit Leuven Department of Mechanical Engineering All rights reserved.