A self-sensing scheme, which allows using Lead Zirconate Titanate (PZT) materials for simultaneous sensing and actuation, has been developed in the context of structural health monitoring (SHM). Based on the self-sensing scheme developed, a time response of the PZT transducer coupled with a mechanical response of the host structure is successfully extracted while the same PZT transducer is excited by a specific input signal. Then, the measured PZT response is used for detecting transducer defects such as PZT cracking and debonding. In order to improve the reliability of transducer diagnosis, the reference-free transducer self-diagnosis scheme based on the developed self-sensing scheme is proposed. Finally, the effectiveness of the proposed self-diagnosis scheme is examined using PZT wafers instrumented on a fixed-free aluminum beam.