Detection of incipient degradation demands extracting sensitive features accurately when signal-to-noise ratio (SNR) is very poor, which appears in most industrial environments. Vibration signals of rolling bearings are widely used for bearing fault diagnosis. In this paper, we propose a feature extraction method that combines Blind Source Separation (BSS) and Spectral Kurtosis (SK) to separate independent noise sources. Normal, and incipient fault signals from vibration tests of rolling bearings are processed. We studied 16 groups of vibration signals (which all display an increase in kurtosis) of incipient degradation after they are processed by a BSS filter. Compared with conventional kurtosis, theoretical studies of SK trends show that the SK levels vary with frequencies and some experimental studies show that SK trends of measured vibration signals of bearings vary with the amount and level of impulses in both vibration and noise signals due to bearing faults. It is found that the peak values of SK increase when vibration signals of incipient faults are processed by a BSS filter. This pre-processing by a BSS filter makes SK more sensitive to impulses caused by performance degradation of bearings.