This study proposes a method for stator fault detection of inverter-fed induction machine in closed-loop control. The sideband response of inverter switching harmonics in common-mode voltage (CMV) is employed to detect the stator inter-turn fault, thus no additional injected signal is necessary. However, the PWM nature harmonics introduce undesired CMV signals, depending on the inherent imbalance or resistance asymmetry. For this reason, the CMV amplitude is not suitable to indicate the fault directly. In this study, the behaviour of switching harmonic is analysed first, and then a simple but efficient stator fault model is demonstrated. To suppress the adverse interference from inverter, an inter-turn fault indicator is proposed by utilising both of the switching sidebands. This method can obtain fault location and severity with low sensitivity to steady operating condition and stator imbalance. The experimental results validate the effectiveness of the proposed method.