Diagnosis of bearings and gears, traditionally uses the envelope (i.e., demodulation) approach. The spectral kurtosis (SK) is a technique used to identify frequency bands for demodulation. These frequency bands are related to the structural resonances, excited by a series of fault-induced impulses. The novel approach for bearing/gear local fault diagnosis is proposed, based on division of bearing/gear vibration signals into specially defined short duration segments and simultaneous processing of SKs of all these segments for damage diagnosis. The SK-filtered vibrations are used for diagnostic feature extraction further subjected to the decision-making process, based on k-means and k-nearest neighbors. The important feature of the proposed approach is robustness to random slippage in bearings. The experimental validation of a bearing inner race local defects (1.2% relative damage size), and simulated gear vibration (15% relative pitting size), shows a very good diagnostic performance on bearing vibrations and gear vibrations to diagnose local faults. Novel diagnostic effectiveness comparison between the proposed technology and wavelet-based technology is performed for diagnosis of local bearing damage.