As industrial competition intensifies, more emphasis is placed on increased productivity and reduction of cost. In every industry, a major component of manufacturing cost is associated with operation and maintenance expenses. Thus, there has been a significant interest expressed by industry in the development of means and methodologies for the reduction of operation and maintenance expenses. Unfortunately, most engineering students go through an engineering curriculum that does not contain any formal courses or training on monitoring and diagnostics. Issues such as cost of operation, technical manpower, maintenance, safety, availability of space, etc. are examples of important factors that prevent universities from establishing such facilities. This paper presents a new concept that overcomes such barriers and difficulties and introduces an engineering health monitoring and diagnostic curriculum by means of an integrated effort between academia and industry. The resulting real and virtual experimental facilities and curriculum in the area of health monitoring and on-line diagnostics are presented and described.