In this paper, concept of cross-bispectrum is used to investigate and model vibration interaction due to nonlinearities in faulted drive shafts in an AH-64 helicopter. Most of the currently available vibration-monitoring tools are built around auto- and cross-power spectral analyses which have limited value in detecting frequency correlations higher than first order. Studying higher order correlations provides more information about the mechanical system which helps in building more accurate diagnostic model using the same collected vibration data. Based on cross-bispectrum as higher order spectral analysis, health conditions of rotating shafts are assessed by studying quadratic nonlinear correlation between two vibration signals collected at the bearing supporting the shafts. Vibration data are gathered from dedicated condition based maintenance experimental helicopter drive-train simulating different shaft conditions, namely; baseline case, shaft misalignment, shaft imbalance, and combination of misalignment and imbalance. For each of these settings, the experiment is repeated three times using different hanger bearing articles, making a grand total of twelve experiment runs. This work is targeting the development of health indicators based on higher order spectra (HOS) for more effective condition based maintenance (CBM) programs.