Considering the problem to diagnose incipient faults in nonlinear analog circuits, a novel approach based on fractional correlation is proposed and the application of the subband Volterra series is used in this paper. Firstly, the subband Volterra series is calculated from the input and output sequences of the circuit under test (CUT). Then the fractional correlation functions between the fault-free case and the incipient faulty cases of the CUT are derived. Using the feature vectors extracted from the fractional correlation functions, the hidden Markov model (HMM) is trained. Finally, the well-trained HMM is used to accomplish the incipient fault diagnosis. The simulations illustrate the proposed method and show its effectiveness in the incipient fault recognition capability.