This paper presents an extended Kalman filter-based (EKF-based) detection method of broken bars in induction machine (IM). The objective is to detect the change in rotor resistance of a cage induction machine in case of one or more broken bars. To analyze the proposed fault detector, simulations are carried out. In the applied simulation environment, finite element method (FEM) model is used to describe the electric behavior of IM. The broken bars are modelled in the FEM simulations.