Vibration characteristics of a cracked Jeffcott rotor with an offset disk under the action of an active magnetic bearing (AMB), implemented to improve the radial positioning of the rotor, has been studied. Presence of the AMB suppresses the vibration induced due to the crack and unbalance; identification of the crack could be made by utilizing the vibration signal in conjunction with the controller current of the AMB. A four degrees-of-freedom (DOF) cracked rotor is modeled considering the gyroscopic effect due to the offset disk and a switching crack excitation function (SCEF) to introduce the breathing of crack. The dynamic condensation is applied to eliminate rotational displacements, which would pose practical difficulty in accurate measurement, from the system equations of motion (EOM) to develop an identification algorithm. Frequency domain transformation of the EOM is made with the help of the full spectrum analysis. An algorithm developed with the purpose of crack identification in the form of additive crack stiffness estimates the viscous damping, disk unbalance, and AMB constants as well. The algorithm has been tested for the measurement noise (in the displacement and the current) and bias errors in system parameters, and found to be robust.