The star-delta (Y-△) connection four-layer winding structure can effectively reduce the low order harmonics of the armature magnetic flux in fractional slot concentrated winding permanent magnet machine (FSCW-PMM). It can broaden the speed range and has good application prospects in the field of electric vehicles. However, due to the multiple phase winding coils in the same slot, this winding structure is complex, which has higher requirements for insulation. This paper proposes a fault diagnosis method based on oscillating current for winding insulation degradation fault in FSCW-PMM with Y-△ connection. Firstly, according to the equivalent impedance model of winding insulation, the changes of impedance inherent resonance point caused by winding insulation degradation in the Y and △ connected parts are analyzed. Then, according to the oscillating current characteristics, fault indicators are constructed for fault diagnosis. Finally, the accuracy and robustness of the fault diagnosis method are verified.