In this paper, a hybrid fault detection, isolation, and recovery (FDIR) methodology is developed for a team of unmanned vehicles which takes advantage of the cooperative nature of the system to accomplish the desired mission in presence of failures. The proposed methodology is hybrid and consists of a low level (agent level) and a high level (team level) FDIR. The high level FDIR is formulated in the discrete-event system (DES) supervisory control framework, whereas the low level FDIR uses the classical control techniques. By properly integrating the two FDIR components, a larger class of faults can be detected and isolated when compared to results in the literature. A reconfiguration strategy is also designed so that the team is recovered from faults. Simulation results are provided to elucidate the efficacy of the proposed approach.