Fault tree analysis is a method that describes all possible causes of a specified system state in terms of the state of the components within the system. Fault trees are commonly developed to analyse the adequacy of systems, from a reliability or safety point of view during the stages of design. The aim of the research presented in this thesis was to develop a method for diagnosing faults in systems using a model-based fault tree analysis approach, taking into consideration the potential for use on aircraft systems. Initial investigations have been conducted by developing four schemes that use coherent and non-coherent fault trees, the concepts of which are illustrated by applying the techniques to a simple system. These were used to consider aspects of system performance for each scheme at specified points in time. The results obtained were analysed and a critical appraisal of the findings carried out to determine the individual effectiveness of each scheme. A number of issues were highlighted from the first part of research, including the need to consider dynamics of the system to improve the method. The most effective scheme from the initial investigations was extended to take into account system dynamics through the development of a pattern recognition technique. Transient effects, including time history of flows and rate of change of fluid level were considered. The established method was then applied to a theoretical version of the BAE Systems fuel rig to investigate how the method could be utilised on a larger system. The fault detection was adapted to work with an increased number of fuel tanks and other components adding to the system complexity. The implications of expanding the method to larger systems such as a full aircraft fuel system were identified for the Nimrod MRA4.