On-line monitoring of synchronous generators can be effective in minimizing overall maintenance costs and downtime associated with the operation of these machines. Faults in the armature and field windings of the synchronous generator are two of the most common failure modes associated with the synchronous generator. Thus, early detection and tracking of these faults has the potential to reduce overall maintenance cost and system downtime. In this paper, an observer is developed to monitor synchronous generator field and armature circuit health. The proposed observer is shown to be capable of detecting the onset of such faults, measure the relative severity of the fault, and differentiate between armature and field faults.