For the integration of global navigation satellite system (GNSS) and inertial navigation system (INS), real-time and accurate fault detection is essential to enhance the reliability and precision of the system. Among the existing methods, the residual chi-square detection is still widely used due to its good real-time performance and sensibility of fault detection. However, further investigation on the performance of fault detection for different observational conditions and fault models is still required. In this paper, the principle of chi-square detection based on the predicted residual and least-squares residual is analyzed and the equivalence between them is deduced. Then, choosing the chi-square detection based on the predicted residual as the research object, the influence of satellite configuration and fault duration time on the performance of fault detection is analyzed in theory. The influence of satellite configuration is analyzed from the number and geometry of visible satellites. Several numerical simulations are conducted to verify the theoretical analysis. The results show that, for a single-epoch fault, the location of faulty measurement and the geometry have little effect on the performance of fault detection, while the number of visible satellites has greater influence on the fault detection performance than the geometry. For a continuous fault, the fault detection performance will decrease with the increase of fault duration time when the value of the fault is near the minimal detectable bias (MDB), and faults occurring on different satellite’s measurement will result in different detection results.