This paper presents an improved interturn fault (ITF) diagnosis method based on the cost function in model predictive control (MPC). This method does not need to build additional observer when constructing fault indicators, and can be easily combined with existing control methods. This method extracts the second harmonic amplitude of the current residual in the cost function online and constructs the fault diagnosis index. At the same time, the fault phase is determined by the angle difference between the second harmonic and the three-phase voltage. Simulation results show the effectiveness of the proposed method.