Condition monitoring of inverter-fed drives is gaining a more important role. Inverter operation enables maximum utilization of a drive. However, some parasitic phenomena may occur, e.g. bearing currents, temperature increase due to additional losses and stress caused by fast voltage rise times. With focus in this work on stator winding insulation an online monitoring method is presented to detect changes in the insulation strength. The insulation health state is assessed at a thermal aged machine by voltage step excitation of the inverter. A change of the electrical strength is evaluated with the transient current response measured for each phase with the built-in sensors of the inverter. The proposed method is able to detect insulation deterioration before an actual short circuit occurs. The results are compared with the insulation condition parameters resulting from additional off-line low-voltage and high-voltage measurements.