Model-based fault detection and isolation is nowadays a well established and mature eld. It starts to become part of the curricula of graduate or post-graduate students. However, the lack of good teaching materials makes di cult the teaching/learning process to students and professors. This paper shows how project-based learning methodology has been used to organise the labs of the fault diagnosis course using a real set-up based on a three-tank system. Observer based methods for fault detection and structured residuals for fault isolation will be introduced to the students from a practical point of view by means of a set of exercises that intend students achieve a set of learning objectives.