Condition monitoring is desired by power electronic system designers as a cost effective means of improving reliability. This paper presents a method to monitor solder fatigue inside a power module by identifying internal thermal resistance increases due to solder fatigue, taking account of the masking effects of a variable operating condition. It is assumed that the total power loss increases as junction temperature rises, causing an increase in the case temperature above ambient, which can be measured. A dynamic thermal model of the heat sink is established, to estimate power loss by measurement, while a device power loss model is developed to estimate internal thermal resistance by further considering the converter electrical loading. Experiment and simulation using validated models are used to characterise the proposed method and verify the concept.