This article presents an experimental application of fault detection, isolation, and estimation in a chemical reactor system, introducing a functional observer‐based approach without the need for linear approximation. The residual signal generators, functioning as disturbance‐decoupled functional observers, provide fault size estimates and enable fault isolation through multiple generators operating independently. The experimental study focuses on the 3‐Picoline oxidation process, deriving a discrete‐time model, and constructing specific residual generators for coolant inlet temperature and feed concentration faults. Fault diagnosis employs Fast Fourier Transform (FFT) filtering and Generalized Likelihood Ratio (GLR), facilitating on‐the‐fly detection during the experiment. The effectiveness of fault detection, disturbance decoupling, and estimation is experimentally validated.