A fault detection system is provided for a display system including an AMLCD. A video processor embeds encoded fault detection data within the digital video stream that is sent directly to the AMLCD. The fault detection data is embedded in such a manner that it is not displayed by the AMLCD. The fault detection data in the digital video stream received by the AMLCD is detected by the AMLCD and is then sent back to the video processor. The video processor compares what was sent with what is received to determine whether there is a difference which may be indicative of a fault in the AMLCD or the path of the digital video stream. As an additional check, the AMLCD may send timing error data to the video processor indicating whether the AMLCD is working properly. The video processor generates and outputs a fault flag to initiate a corrective action if a fault is detected in the AMLCD and/or the path of the digital video stream.