Abstract: In order to shorten the mean fault isolation time (MFIT) of system-level BIT, an entropy-indirected algorithm for system-level fault isolation is developed based on the main idea of enl ropy-directed algorithm by using the information flow model and information theory.The related problems are also discussed in engineering application. The entropy-directed algorithm needs manual intervention to construct fault isolation strategy,and it is ofεhigh computation complexity.Theoretical analysis and experimental results illustrate that the entropy indirected algorithm remedies such deficiency. The MFIT of the strategy by this algorithm is about 38% less than that by the entropy- directed algorithm under the assumption of unequal fault rate.