Abstract: In this paper, based on Delta Operator, signal vectors of Hilbert space are constructed, an input-output model is derived, and both the forward and backward prediction error vectors are described. With the help of Lattice filters, recursive algorithms for generating time-updated as well as order-updated residual series are formed, so that a fault detection filter is designed. Combined with the approach of .adaptive noise canceling, real time, on-line fault detection is carried out. Finally, simulating experiments show that this fault detection method is effective.