The effects of inverter harmonics on motor current fault signatures are studied in detail in this paper. According to theory and experimentation, the fault signatures caused by the inverter harmonics are similar and comparable to those generated by the fundamental harmonic of the line current. Unlike the utility-driven motor, monitoring the current of the inverter-fed motor is considerably noisy, which can mask the fault signatures and render a wrong fault warning. Therefore, the proposed additional fault data processing technique is expected to support the inverter-fed motor fault decision making algorithms effectively. The theoretically derived bearing fault relations are found to match the experimental results. In order to confirm these claims, outer race bearing faults are tested and the line current spectrum of the faulty motor is compared to the healthy one.