The work presented in this thesis discusses the model-based fault diagnosis and fault-tolerant control with application to a nonlinear electro-hydraulic system. High performance control with guaranteed safety and reliability for electro-hydraulic systems is a challenging task due to the high nonlinearity and system uncertainties. This thesis developed a diagnosis integrated fault-tolerant control (FTC) strategy for the electro-hydraulic system. In fault free case the nominal controller is in operation for achieving the best performance. If the fault occurs, the controller will be automatically reconfigured based on the fault information provided by the diagnosis system. Fault diagnosis and reconfigurable controller are the key parts for the proposed methodology. The system and sensor faults both are studied in the thesis. Fault diagnosis consists of fault detection and isolation (FDI). A model-base residual generating is realized by calculating the redundant information from the system model and available signal. In this thesis differential-geometric approach is employed, which gives a general formulation of FDI problem and is more compact and transparent among various model-based approaches. The principle of residual construction with differential-geometric method is to find an unobservable distribution. It indicates the existence of a system transformation, with which the unknown system disturbance can be decoupled. With the observability codistribution algorithm the local weak observability of transformed system is ensured. A Fault detection observer for the transformed system can be constructed to generate the residual. This method cannot isolated sensor faults. In the thesis the special decision making logic (DML) is designed based on the individual signal analysis of the residuals to isolate the fault. The reconfigurable controller is designed with the backstepping technique. Backstepping method is a recursive Lyapunov-based approach and can deal with nonlinear systems. Some system variables are considered as ``virtual controls'' during the design procedure. Then the feedback control laws and the associate Lyapunov function can be constructed by following step-by-step routine. For the electro-hydraulic system adaptive backstepping controller is employed for compensate the impact of the unknown external load in the fault free case. As soon as the fault is identified, the controller can be reconfigured according to the new modeling of faulty system. The system fault is modeled as the uncertainty of system and can be tolerated by parameter adaption. The senor fault acts to the system via controller. It can be modeled as parameter uncertainty of controller. All parameters coupled with the faulty measurement are replaced by its approximation. After the reconfiguration the pre-specified control performance can be recovered. FDI integrated FTC based on backstepping technique is implemented successfully on the electro-hydraulic testbed. The on-line robust FDI and controller reconfiguration can be achieved. The tracking performance of the controlled system is guaranteed and the considered faults can be tolerated. But the problem of theoretical robustness analysis for the time delay caused by the fault diagnosis is still open.