This study proposes a new nonlinear dynamic model of rolling bearing faults based on a collision impact system. The dynamic model accounts for the collision impact system consisting of the rolling elements and localized faults according to the nonlinear Hertzian contact. First, considering the impact of the rolling element and fault structure, the collision impact system between rolling element and localized fault is established, and the vibration responses of the collision impact system can be obtained. Second, the overall rolling bearing is treated as a mass-spring model, and the contact between the rolling element and raceway is treated as a nonlinear spring that conforms to the Hertzian contact deformation theory. Third, according to the Lagrange equation, overall potential energy, overall kinetic energy, elastic potential energy, and kinetic energy of the collision impact system are used to describe the vibration characteristics. Considering the impact of collision impact systems, a nonlinear dynamic model of rolling bearing faults is established. The simulated acceleration results based on the nonlinear dynamic model are compared to experimental results. The comparison indicates that the numerical model can be used to predict the vibration characteristics of rolling bearings faults effectively.