It is important to diagnose the bearing fault to prevent the serious accident of equipment. This paper introduces a bearing fault identification scheme based on envelope power spectrum analysis, linear discriminate analysis and continuous hidden Markov model. First the envelope power spectrum features are extracted from amplitude demodulated vibration signals from fault bearings. Then, linear discriminate analysis is employed to reduce the feature dimensions, which are helpful for improving the computing speed and diagnosing accuracy. At last, the new linear discriminate analysis features are input into continuous hidden Markov model to train the models under different conditions, respectively. In bearing fault identification, test data are input into the pretrained continuous hidden Markov models, and the bearing state can be detected by the output of continuous hidden Markov model. To validate the effectiveness of the proposed method, experimental samples of four bearing conditions at different fault sizes and loads are utilized to test the continuous hidden Markov model and back-propagation neural network. The result shows that continuous hidden Markov model and linear discriminate analysis-based method have higher accuracy and efficiency than back-propagation neural network.