Within the framework of the diagnosis of the stator windings faults, the authors propose in this paper a recursive diagnosis method for on-line detection and location of an inter-turn short-circuit by parameters identification. This approach based on the Recursive Levenberg-Marquardt (RLM) algorithm is used for the minimization of the objective function represented by the quadratic criterion obtained by the difference between the real outputs and their estimations. Tests and validations of failure detection by parameter identification require a model suited for fault modelling. For this purpose, a faulty induction motor model is proposed. Electric parameters of this model as well as fault parameters are estimated by RLM adaptive algorithm through an output-error technique. Because the parameters values of this model present magnitude order very different, the normalization of these parameters is proposed in order to obtain the sensitivity functions with the same magnitude order. The estimation results, which used simulated data, are presented to show the effectiveness and the advantage of the proposed approach for use in real-time stator faults diagnosis.