System Health Management (SHM) is an example of the types of challenging applications facing embedding high-performance computing environments. SHM systems monitor real-time sensors to determine system health and performance. Performance, economics, and safety are all at stake in SHM, and the emphasis on health management technology is motivated by all these considerations. This paper describes a project focusing on condition-based maintenance (CBM) for naval ships. Condition-based maintenance refers to the identification of maintenance needs based on current operational conditions. In this project, system architectures and diagnostic and prognostic algorithms are being developed that can efficiently undertake real-time data analysis from appropriately instrumented machinery aboard naval ships and, based on the analysis, provide feedback to human users regarding the state of the machinery - such as its expected time to failure, the criticality of the equipment for current operation.