This research deals with the design and implementation of an on-line monitoring system for a 3-phase induction motor. This subject is widely considered by many researchers in different approaches, but the most difficult step is to perform an efficient, accurate, and all inclusive database. The Finite Element Method (FEM) performs a flexible model of the induction motor, able to simulate all the expected faults without doing any destructive tests. The methodology used in this research is to compare the model data with that obtained from a real faulty machine. The designed system adopts Maxwell2D computer package for this purpose. The Motor Current Signature Analysis (MCSA) technique applied in conjunction with Fast Fourier Transform to performing on-line data from the motor. A LabView environment used to match the computer and the hardware of the monitoring system. The proposed system results in an efficient monitoring, fault diagnosis system. But this work leads to conclude that the 2D FEM can simulate the most expected faults so, a 3D analysis required for this purpose, also such study is not suitable for an inverter fed motors. KEYWORDS: MCSA, FEM, ANSYSMaxwell2D, Induction Motor, Electrical Fault, Flux Distribution.