In this paper, a rotor current fault monitoring method is proposed based on a sliding mode observer. Firstly, the state-space model of the Double-Fed Induction Generator (DFIG) is constructed by vector transformation. Meanwhile, the stator voltage orientation vector control method is applied to decouple a stator and rotor currents, so as to obtain the correlation between the stator and rotor current. Furthermore, the mathematical model of stator voltage orientation is obtained. Then a state sliding mode observer (SMO) is established for the output current of the rotor of the DFIG. The stability and reachability of the system in a limited time is proved. Finally, the system state is determined by the residuals of the measured and estimated rotor currents. The simulation results show that the method proposed in this paper can effectively monitor the status: a normal state, voltage drop faults, short-circuit faults between windings, and rotor current sensor faults which have the advantages of fast response, high stability.