The diesel engine has been a significant component of large-scale mechanical systems for the intelligent manufacturing industry. Because of its complex structure and poor working environment, it has trouble effectively acquiring the representative fault features. Further, fault diagnosis of the diesel engine faces great challenges. This paper presents a new fault diagnosis method for the detection of diesel engine faults under multiple operation conditions instead of conventional methods confined to a single condition. First, an adaptive correlation threshold process is designed as a preprocessing unit to enhance data quality by weakening non-impact region characteristics. Next, a feature extraction method for sound signals based on the Mel frequency cepstrum (MFC) is improved and introduced into the machinery fault diagnosis. Then, the combination of the improved feature and vibrational mode decomposition (VMD) is proposed to incorporate VMD into an effective adaptive decomposition of non-stationary signals to combine it with an excellent feature representation of the vibration signal. Finally, the vector quantization algorithm is adopted to reduce the feature dimensions and generate codebook model bases, which trains the K-Nearest Neighbor classifiers. Five comparative methods were carried out, and the experimental results show that the proposed method offers a good effect of the common valve clearance fault of diesel engines under different conditions.