Condition monitoring of rotor problems such as demagnetization and eccentricity in permanent magnet synchronous motors (PMSM) is essential for guaranteeing high motor performance, efficiency, and reliability. However, there are many limitations to the off-line and on-line methods currently used for PMSM rotor quality assessment. In this paper, an inverter-embedded technique for automated detection and classification of PMSM rotor faults is proposed as an alternative. The main concept is to use the inverter to perform a test whenever the motor is stopped, to detect rotor faults independent of operating conditions or load torque oscillations, which is not possible with motor current signature analysis (MCSA). The d-axis is excited with a dc+ac signal, and the variation in the inductance pattern due to the change in the degree of magnetic saturation caused by demagnetization or eccentricity is observed for fault detection. An experimental study on a 7.5kW PMSM verifies that demagnetization and eccentricity can be detected and classified independent of the load with high sensitivity.