The science base that underlies modelling and analysis of machine reliability has remained substantially unchanged for decades. Therefore, it is not surprising that a significant gap exists between available machinery technology and science to capture degradation dynamics for prediction of failure. Further, there is a lack of a systematic technique for the development of accelerated failure testing of machinery components. This article develops a thermodynamic characterization of degradation dynamics, which employs entropy, a measure of thermodynamic disorder, as the fundamental measure of degradation; this relates entropy generation to irreversible degradation and shows that components of material degradation can be related to the production of corresponding thermodynamic entropy by the irreversible dissipative processes that characterize the degradation. A theorem that relates entropy generation to irreversible degradation, via generalized thermodynamic forces and degradation forces, is constructed. This theorem provides the basis of a structured method for formulating degradation models consistent with the laws of thermodynamics. Applications of the theorem to problems involving sliding wear and fretting wear, caused by effects of friction and associated with tribological components, are presented.