Stator insulation quality assessment is an important issue for PWM inverter-fed machines, since the stator insulation is exposed to increased thermal/electrical stresses. In this paper, a new approach for monitoring the condition of the stator insulation for inverter-fed machines is proposed. The main concept of the proposed approach is to apply various types of test voltages to the motor stator insulation using the inverter, to perform standard off-line insulation tests whenever the motor is not operating. Two methods for testing the insulation with modifications to the inverter circuit are proposed and verified experimentally. The results show that the proposed technique provides a simple low cost solution for detecting stator insulation degradation at an early stage for reliable operation of inverter-fed machine systems, since the insulation condition can be monitored frequently. This not only helps prevent forced outages and safety risks due to insulation breakdown, but also helps perform maintenance in an efficient manner since individual motor maintenance can be prioritized and scheduled based on its present condition.