With growing the complexity of engineering systems and development of sophisticated control systems, probability of fault occurrence has increased; therefore safety and reliability have become important system requirements. In this regard, the study on fault diagnosis and design of fault tolerant control systems (FTCs) for dynamical systems has received considerable attention. Design of fault tolerant controller or fault accommodation is one of the effective methods which ensures the stability and reliability of the system. Fault detection which is used for system monitoring and determination of the time of the fault occurrence, is the first step for fault accommodation controller design. Upon fault detection, a real time adaptive estimator is activated to estimate the magnitude and severity of the fault. Fault estimation is an important task because it provides efficient information about detected fault for controller design. Compared with fault detection, the design difficulties of fault estimation would increase a lot. So, research on fault estimation and accommodation is very challenging. In this thesis, a fault tolerant controller is designed for a inter-ideograph; TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt" Key words Fault detection and estimation, nonlinear Lipschitz systems, adaptive observer, fault accommodation controller