This paper proposes a sensor-fault detection and isolation (FDI) approach based on interval observers and invariant sets. In fault detection (FD), both interval observer-based and invariant set-based mechanisms are used to provide real-time fault alarms. In fault isolation (FI), the proposed approach also uses these two different mechanisms. The former, based on interval observers, aims to isolate faults during the transient-state operation induced by faults. If the former does not succeed, the latter, based on both interval observers and invariant sets, is started to guarantee FI after the system enters into steady state. Besides, a collection of invariant set-based FDI conditions are established by using all available system-operating information provided by all interval observers. In order to reduce computational complexity, a method to remove all available but redundant/unnecessary system-operating information is incorporated into this approach. If the considered faults satisfy the proposed FDI conditions, it can be guaranteed that they are detectable and isolable after their occurrences. This paper concludes with a case study based on a subsystem of a wind turbine benchmark, which can illustrate the effectiveness of this FDI technique.