Abstract Inclusion of real system data and a systematic model-based approach provides new opportunities in the field of fault diagnosis. The included work was conducted during the first phase of a larger multi-phase project that has the goal of developing methods for detection and diagnosis of faults in large, complex industrial fluid systems. This paper focuses on the application of a systematic model-based fault detection and isolation (FDI) methodology to a small-scale pneumatic test bench for proof of concept. FDI schemes were physically implemented on the test bench, leading to successful detection and isolation of injected faults using developed residuals.