A novel scheme is proposed to position the slot of distributed polar rotor where the inter-turn short circuit occurs. It utilizes the wavelet transform digital signal processing method based on on-line field detecting coil to process the fault signal and applies the Mallat algorithm to reconstruct the details of signals within the high frequency bandwidth. By doing so， it can correctly locate the singularity that appears on the measured potential signal to diagnose fault slot correspondingly. The integrated efficient diagnosis program at high-speed floating point DSP chip is made to produce a set of on-line inter-turn short circuit monitor system. Experimental results prove the validity and feasibility of the scheme proposed.