The problem of distributed fault detection and isolation (DFDI) in conjunction with time‐varying formation control of unmanned aerial vehicle (UAV) multi‐agent systems with multiple‐leader leader–follower structure is studied, in this paper. It is assumed that the communication data of the agents are noisy, and faults may occur in either leaders or followers. The followers are not aware of the main trajectory and just follow the leaders. The first step in this paper is to reduce the communication noise. Besides, if a fault occurs in one of the leaders causing to exit the leader from the main trajectory, the followers should be able to detect the fault, isolate the leader, use the other leaders' data, and keep the main trajectory. Tracking the trajectory by followers in such a case is the second step of this paper. Preserving the time‐varying formation despite a fault occurring in one of the followers is the next step. To reach these goals, a distributed array of Kalman filters is used for noise cancellation and data extraction. Next, the combination of state vector data fusion and some type of
χ2 test are employed for DFDI, in agents. Besides, a controller is implemented in each agent for formation tracking. In this controller, estimated relative position and velocity vectors of the agents are employed to keep the time varying formation while tracking the leaders. The closed‐loop stability is studied via Lyapunov stability theorem, and various simulations are carried out to demonstrate the capability of the proposed strategy.