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Considers control systems operating under potentially faulty conditions. Discusses the problem of designing a single unit which not only handles the required control action but also identifies faults occurring in actuators and sensors. In common practice, units for control and for diagnosis are designed separately. Attempts to identify situations in which this is a reasonable approach and cases in which the design of each unit should take the other into consideration. Presents a complete characterization for each case and gives systematic design procedures for both the integrated and non‐integrated design of control and diagnosis units. Shows how a combined module for control and diagnosis can be designed which is able to follow references and reject disturbances robustly, control the system so that undetected faults do not have disastrous effects, reduce the number of false alarms and identify which faults have occurred.