For the real time fault diagnosis of machinery vibration, the Morlet wavelet transform (WT) simulation implementation based on switched current (SI) circuits is proposed. The application of switched current circuits for Gaussian function generator solves the key problem in the analog implementation of Morlet WT, and the good performance of SI Gaussian function generator is verified by simulated results. It applies Morlet wavelet transform in machine vibration fault diagnosis and locates singular signal according to wavelet transform module maximum of the vibration signal to extract fault information. The simulation results show that the method for real time fault diagnosis of the mechanical vibration is effective.