The quality of information extracted from the vibration signals, and the accuracy of the bearing status detection depend on the methods used to process the signal and select the informative features. In this paper, a new hybrid approach is introduced in which the relatively new swarm decomposition (SWD) method and the optimized compensation distance evaluation technique (OCDET) are used to enhance the signal processing stage and to improve the optimal features selection process, respectively. Firstly, the vibration signals are decomposed into their Oscillatory Components (OCs) using the SWD. The feature matrix is constructed by computing the time-domain features for the OCs. The CDET method is consequently utilized to select the most sensitive features corresponding to the bearing status. On the other hand, The CDET approach contains a parameter called threshold which affects the number of the selected features. In this way, the hybrid optimization algorithm, which is a combination of the Particle Swarm Optimization (PSO) algorithm with the Sine–Cosine Algorithm (SCA) and the Levy flight distribution, has been used to select the optimal CDET threshold and improve the support vector machine (SVM) classifier. The proposed technique ability is evaluated by vibration signals corresponding to different bearing defects and various speeds. The results indicate the capability of the proposed fault diagnosis method in identifying the very small-size defects under various bearing conditions. Finally, the presented method shows better performance in comparison with other well-known methods in the most of the case studies.