Compressed air systems consume significant energy in automotive vehicle manufacturing systems. The plant air and instrument air systems are focused towards utilization with respect to assembly, painting, and inspection tasks. The paper will describe the various diagnostic tools and methods that can be used effectively in the development of energy efficiency measures in the compressed air systems. The energy efficiency measures relating to opportunities such as reduction of air leaks, reduction of compressed air pressure, heat recovery from compressor, compressor motor performance, wastage of air in end uses, and compressor system analysis require the use of diagnostic equipment for data collection purposes. The paper will describe the experience of the Industrial Assessment Center (IAC) at West Virginia University (WVU) in the use of the energy analysis and diagnostic equipment in compressed air systems and will examine the practical aspects of data acquisition and subsequent use in the development of energy efficiency measures with adequate examples.