In this paper, a novel nonlinear unknown input observer is proposed in order to fault estimation for nonlinear uncertain systems with time delays. By the estimation of the faults, the features are detected such as shape, size occurrence time etc. The time delay is considered a constant and known parameter in the states. The disturbances are investigated in the states and outputs and also, and sensor and actuator faults are considered. The stability of the closed‐loop system is guaranteed by Lyapunov–Krasovskii theory and some feasible Linear matrix inequalities (LMI). The proposed method is simulated on a continuous‐stirred tank reactor (CSTR) with uncertainties and time delay. Simulation results show the appropriate efficiency of the proposed method.