Condition monitoring of engine gas generators plays an essential role in airline fleet management. Adaptive diagnostic systems are becoming available that interpret measured data, furnish diagnosis of problems, provide a prognosis of engine health for planning purposes, and rank engines for scheduled maintenance. More than four hundred operations worldwide currently use versions of the first or second generation diagnostic tools. Development of a third generation system is underway which will provide additional system enhancements and combine the functions of the existing tools. Proposed enhancements include the use of artificial intelligence to automate, improve the quality of the analysis, provide timely alerts, and the use of an Internet link for collaboration. One objective of these enhancements is to have the intelligent system do more of the analysis and decision making, while continuing to support the depth of analysis currently available at experienced operations. This paper presents recent developments in technology and strategies in engine condition monitoring including: 1) application of statistical analysis and artificial neural network filters to improve data quality; 2) neural networks for trend change detection, and classification to diagnose performance change; and 3) expert systems to diagnose, provide alerts and to rank maintenance action recommendations.