SummaryThis paper develops a new active fault‐tolerant control system based on the concept of analytical redundancy. The novel design presented here consists of an observation filter–based fault detection and identification system integrated with a nonlinear model predictive controller. A number of observation filters are designed, integrated with the nonlinear controller, and tested before reaching the final design, which comprises an unscented Kalman filter for fault detection and identification together with a nonlinear model predictive controller to form an active fault‐tolerant control system.