Increasing deployment of wind turbines requires efficient condition monitoring to ensure the safety and availability of these machines. Grid code also requests the operator to enhance the monitoring of the quality of the power generated by the wind turbine. Most commercially available wind turbine condition monitoring systems are supported by a number of vibration transducers. They consequently are complex in hardware, expensive in price, but inefficient in computation and particularly lack of power quality monitoring ability. In view of this, an innovative electrical signal analysis-based wind turbine condition and power quality monitoring technique is developed in this paper by the approach of individual harmonic extraction. The proposed technique has been verified in the lab by applying to detecting both the mechanical and electrical faults emulated on a specially designed wind turbine condition monitoring test rig. Experiments show that the proposed technique is not only sensitive to the faults, but alert to the degradation of power quality.