The fault detection system of liquid rocket propulsion was proposed and tested. This part is the foundation of liquid rocket propulsion health management system. Firstly, the real-time fault model was set up here, based on this model we got the failure parameters. Secondly, the RESID model was used to detect the fault, then the simulation of real-time fault detection method was carried out. At last, the hardware-in-the -loop platform containing software and hardware was set up for the engine detection. The results show that the real-time fault detection method work well.