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In this paper, a fault-tolerant control scheme is proposed for interconnected systems within an integrated design framework to yield timely monitoring and detection of fault and reconfiguring the controller according to those faults. The unscented Kalman filter-based fault detection and diagnosis system is initially run on the main plant and parameter estimation is done for the local faults. This critical information is shared through information fusion to the main system where the whole system is being decentralized using the overlapping decomposition technique. Using these parameter estimates of decentralized subsystems, a model predictive control adjusts its parameters according to the fault scenarios, thereby striving to maintain the stability of the system. Experimental results on interconnected continuous time stirred tank reactors with a recycle and quadruple tank system indicate that the proposed method is capable of correctly identifying various faults, and then controlling the system under some conditions. [ABSTRACT FROM PUBLISHER]