Multibody dynamics of healthy and faulty rolling element bearings were modeled using vector bond graphs. A 33 degree of freedom (DOF) model was constructed for a bearing with nine balls and two rings (11 elements). The developed model can be extended to a rolling element bearing with elements and DOF in planar and DOF in three dimensional motions. The model incorporates the gyroscopic and centrifugal effects, contact elastic deflections and forces, contact slip, contact separations, and localized faults. Dents and pits on inner race and outer race and balls were modeled through surface profile changes. Bearing load zones under various radial loads and clearances were simulated. The effects of type, size, and shape of faults on the vibration response in rolling element bearings and dynamics of contacts in the presence of localized faults were studied. Experiments with healthy and faulty bearings were conducted to validate the model. The proposed model clearly mimics healthy and faulty rolling element bearings.