To protect people and equipment, three-phase AC drives need to be properly grounded, and ground faults need to be quickly detected. Conventional methods of detecting ground faults are affected by external factors that reduce their sensitivity. As an improvement on conventional methods, ground fault detection is accomplished by deriving a neutral point from the three-phase output of an AC drive, decoupling normal operating currents of the AC drive from the neutral point, resistively grounding the neutral point, and sensing when a magnitude of signals between the neutral point and ground exceed a maximum threshold level, ground faults are quickly detected. By effectively filtering normal operating currents from ground fault current, detection sensitivity is improved.