-This paper presents a modified adaptive fading EKF (AFEKF) for sensor fault detection and isolation in the satellite. Also, the fault detection and isolation (FDI) scheme is developed in three phases. In the first phase, the AFEKF is modified to increase sensor fault detection performance. The sensor fault detection and sensor selection method are proposed. In the second phase, the IMM filer with scalar penalty is designed to detect wherever actuator faults occur. In the third phase of the FDI scheme, the sub-IMM filter is designed to identify the fault type which is either the total or partial fault. An important feature of the proposed FDI scheme can decrease the number of filters for detecting sensor fault. Also, the proposed scheme can classify fault detection and isolation as well as fault type identification.