Monitoring the condition of induction motors requires continuous inspection of all motor components. The three-phase stator windings forming the critical components of the motors and handling heavy currents as high as twice the blocked rotor current under inter-turn short circuits necessitate a fault detection system that is efficient, appropriate, and worthwhile. The proposed algorithm takes measurements of the three-phase supply voltages and phase currents and plots their loci for each cycle under various fault levels. The proposed simple, nonintrusive, less expensive, and fault-sensitive voltage-current loci (£(v-i))-based technique accurately identifies the faulty phase and detects stator inter-turn faults (SITFs). In addition, the algorithm corrects supply voltage imbalances, winding asymmetries, and calibration errors of sensing elements. It contributes to examining the insulation condition of the stator windings at the onset and identifying the faulty phase of a motor. The experimental results for a 1 hp, 415 V squirrel-cage induction motor (SCIM) in a laboratory investigation validate the competence of the proposed technique under various fault levels and load conditions.