This paper provides an adaptive hybrid robust filter (AHRF) for multi-sensor relative navigation systems that can be used to support cooperative intelligent transport systems. It is known that Huber’s M-estimation based robust filter and the fault detection and exclusion (FDE) based RAIM filter each has its own drawbacks, depending on the nature of the observation error biases. Based on the interactive multiple model (IMM) framework, our proposed AHRF in this paper can take advantage of both filters in a complementary sense. A new adaptive IMM (AIMM) algorithm with Markov transition probability prediction is proposed to allow AHRF to switch efficiently between the two filters. We consider the relative navigation system with Global Navigation Satellite System (GNSS) and ultra-wideband (UWB) as observations to verify AHRF in three cases of possible failure modes and multipath-induced errors. Our results show that AHRF outperforms both the FDE and robust filter in all cases. AHRF framework can be further adapted to include many other fault-tolerant filters to improve the robustness of multi-sensor relative navigation system even further.