An on-line fault detection and avoidance method is provided for industrial control systems that include multiple interacting process controllers. The method addresses the problem that not all faults can be determined and removed at the time of system design and testing. When a fault translates into a time-out condition in one or more controllers, symptoms are identified, persistence is measured, other involved controllers are identified, the fault condition is identified and control laws are reconfigured to avoid the fault condition in the future.