This project is a continuation of MOU 373. It concludes ongoing research to extend and integrate existing results on fault diagnostic and fault management research, and develop a comprehensive fault management system. Features include a multi-layer fault diagnostic and management system, diagnosis of faults in the sensors and actuators of the lateral and longitudinal control systems, detection of faults in the most vital sensors and actuators, and development of a systematic methodology for processing diagnostic residues. Experimental implementation and testing of the completed sys-tem is carried out in this project. This work is important because fault diagnostics and management appear to be the most important technical issues remaining to be resolved before vehicle automation can be implemented. “Soft” faults such as tire/road conditions variations have been extended in this project. An analytical model for calculating the longitudinal and lateral traction/braking forces and the self-alignment moment and the effect of wet road conditions on the tire/road friction model have been discussed and developed in this project.