A novel process monitoring method based on modified Bayesian classification on PCA subspace is proposed. Fault detection and identification are the major steps to diagnose root causes of a process fault. However, before the faulty variables from the abnormal operations are identified, the different operating states need to be clustered from the historical data. The proposed approach modifies the Bayesian classification method to cluster data into groups. Therefore, a new fault identification index is derived based on cluster center and covariance. An industrial compressor process is used to demonstrate the effectiveness of the proposed approach. In the example, process-insight-based variables were monitored along with the measured variables. The capability of fault diagnosis has been improved, since the fault identification indices are directly related to the variables with process characteristics.