This paper presents a new wavelet-based algorithm for three-phase induction machine fault detection. This new method uses the standard deviation of wavelet coefficients, obtained from n-level decomposition of each phase voltage and current, to identify single-phasing faults or unbalanced stator resistance faults in induction machines. The proposed algorithm can operate independent of the operational frequency, fault type and loading conditions. Results show that this algorithm has better detection response than the Fourier transform-based techniques.