-In recent times, multilevel inverters are given high priority in many large industrial drive applications. However, the reliability of multilevel inverters are mainly affected by the failure of power electronic switches. In this paper, open-switch and short-switch failure of multilevel inverters and its identification using a high performance diagnostic system is discussed. Experimental and simulation studies were carried out on five level cascaded H-Bridge multilevel inverter and its output voltage waveforms were analyzed at different switch fault cases and at different modulation index values. Salient frequency domain features of the output voltage signal were extracted using the discrete wavelet transform multi resolution signal decomposition technique. Real time application of the proposed fault diagnostic system was implemented through the LabVIEW software. Artificial neural network was trained offline using the Matlab software and the resultant network parameters were transferred to LabVIEW real time system. In the proposed system, it is possible to precisely identify the individual faulty switch (may be due to open-switch (or) short-switch failure) of multilevel inverters.