This paper proposes a strategy to design a minimal and fault-tolerant sensor network for observability of complex systems. Complex systems are large-scale dynamic systems composed of interconnected subsystems. The objective is to determine the sensors to be used so that the system is observable while minimizing the number of sensors. The strategy is based on breaking down complex systems into interconnected subsystems. System breakdown helps in treating each subsystem separately and allows using reduced-order observers rather than a large-scale observer for the overall system. An academic example is given to illustrate the proposed strategy. SENSOR NETWORK DESIGN FOR COMPLEX SYSTEMS 497 design. This problem has been studied over the last 30 years: the criteria of observability [1,2], maximum estimation accuracy [1,3,4], and minimum cost [1,5] were considered in the design of sensor network. In addition, other criteria like maximizing faults detectability and isolability [6][7][8][9], redundancy [1,10], and reliability [1,4,7,[11][12][13] were introduced in the design objectives. The focus was mainly on chemical plants [2,3,5,7,9,11,12]. In [14], the authors proposed a methodology for designing the optimal sensor configuration (number and location of sensors) for a vehicle active suspension such that the corresponding measured data are most informative about the condition of the vehicle. Other studies treated steady-state [1], linear [4,11], and bilinear processes [12] and structured systems [15].Among the used approaches to sensor network design, the graph theory [10-12] is employed to exploit the structure of the process. The representation of processes by graphs has been extensively used in process flowsheeting and in other applications of process design and analysis. Graphs are composed of nodes and branches where the nodes correspond to process state variables and the branches represent the causal relationships between the process variables. In [7] and [9], the authors use the signed digraph (SDG) approach, which is concerned with the cause-effect analysis of systems. In this case, the SDG is used for locating sensors in complex chemical plants to enable fault diagnosis where the SDG model is sufficient to observe the effects of faults on different process variables, avoiding complex mathematical relationships between various process variables. Genetic algorithms are employed in [4] for optimal design of a sensor network for linear processes. The genetic operators are specially designed using graph-theoretic principles in order to exploit the structural properties of the problem. One advantage of using a genetic algorithm is that the same algorithm can be used without modification for different objectives (such as cost, estimation accuracy, reliability) and may be extended for multi-objective optimization. Structural analysis is used in [15] for sensor location in the fault detection and isolation problem of structured systems. For such systems, the entries of the matrices are either fixed zeros or free param...