Coated bearings in high-performance turbine engines have the potential to provide considerable improvement in engine reliability and service-life extension. One coating performance indicator is the level of vibration generated by rolling elements and their cage separators at high-speed bearing operation. This article introduces a nonintrusive, cage-mounted sensor that detects cage vibration and transmits wirelessly to a nearby receiver. The sensitivity of the cage-mounted sensor was compared to a housing-mounted accelerometer in the detection of seeded faults in coated and uncoated bearings. The smallest spall on an uncoated bearing that the sensor could detect was 28 µm deep × 3.2 mm wide, with a reliability of ∼40%. In contrast, the accelerometer consistently detected all levels of flaws, the smallest being 0.4 µm deep × 3.2 mm wide on the coated bearing, with a reliability of 55%. Despite the sensor having a detection rate less than the accelerometer, this research successfully demonstrated that the sensor could detect inner-racebearing flaws and established its sensitivity level.