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The design of sensor fault detection and isolation (FDI) systems has been studied widely by several authors of different fields of science (engineering, mathematics, physics) to ensure the continuous operation of systems or processes. This research presents the design and evaluation of a fault detection and isolation (FDI) system based on discrete fractional-orderhigh-gain observers (DFOHGO) for the outlet temperature sensors of a heat exchanger. The formulation of the discrete fractional-order observers is based on the Grünwald–Letnikov fractional-order derivative. The FDI system is based on a bank of two DFOHGOs to carry out a residual evaluation. The obtained results showed that the DFOHGOs provide accurate estimations of the temperatures. This allows switching the faulty sensor signal to the temperature estimations provided by the DFOHGOs when a fault occurs.