A novel method is introduced for inter-turn short circuit fault diagnosis in stator winding of a three-phase wound rotor induction motor. The use of the wavelet transform of rotor current for the fault diagnosis is proposed. In this paper, first, behavior of the motor with stator inter-turn fault and the generated frequencies in rotor current by the fault are investigated using fast Fourier transform. It has been seen that these frequencies are in a specific band of frequencies; therefore, wavelet transform of rotor current is an appropriate mean for diagnosis of the proposed fault. Then, an attempt is made to fully diagnose the fault at appropriate time by a proper selection of sampling frequency and time of monitoring in order to prevent the serious damage to the motor. Finally, to verify the fault diagnosis methods, the results obtained by finite element method are compared with experimental results.