A novel approach for the actuator fault diagnosis of time delay systems is presented by using an adaptive observer technique. Systems without model uncertainty are initially considered, followed by a discussion of a general situation where the system is subjected to either model uncertainty or external disturbance. An adaptive diagnostic algorithm is developed to diagnose the fault, and a modified version is proposed for general system to improve robustness. The selection of the threshold for fault detection is also discussed. Finally, a numerical example is given to illustrate the efficiency of the proposed method. A novel approach for the actuator fault diagnosis of time delay systems is presented by using an adaptive observer technique. Systems without model uncertainty are initially considered, followed by a discussion of a general situation where the system is subjected to either model uncertainty or external disturbance. An adaptive diagnostic algorithm is developed to diagnose the fault, and a modified version is proposed for general system to improve robustness. Finally, a numerical example is given to illustrate the efficiency of the proposed. method.