This paper presents the development of a method for condition monitoring and online fault detection on proportional directional valves. The systems that such valves are part of might be sensitive for unexpected maintenance or long duration stops. Consequently, the implementation of a fault detection and monitoring system can reduce maintenance costs and increase safety. The method is based on monitoring both the valve supply current and spool position related to the spool positioning control signal. Therefore, it is applicable for valves with embedded electronics including spool position measurement and internal controller. The supply current and spool position behavior depends on the friction, flow forces, solenoid current, and valve closed loop controller performance. Furthermore, valve static and dynamic characteristics are influenced by the spool size, overlapping and manufacturing tolerances. The effectiveness of the method to monitor and detect faults in valves with different sizes and constructive parameters is shown experimentally using five different proportional valves. The proposed method requires reference parameters characterizing the valve operation without faults. Standard tests are proposed to determine healthy valve parameters. For the method valuation and validation, experimental results with the valve operating under healthy conditions and with induced faults were compared. Faults were added in a way to represent spool locking and increase of friction forces between the spool and sleeve. The obtained results show the capability the method for the detection of faults classified as severe even if the valve controller attempts to compensate the faulty behavior.