The model based fault identification method was used to identify the two unbalance faults in two-span rotor system. The unbalance location and magnitude were identified using least squares fitting approach by the system’s transient residual vibration. The all-phasic FFT technique was used to analyze the original phases of vibration signals. The unbalance location and magnitude of the rotor system can be detected by using only a few sensors. Numerical simulations and experiment on rotor system with two unbalance faults were used, which proved the efficiency of the method.