The objectives of this research are to design a heterogeneous network of embedded systems so that faults can be quickly detected and isolated and to develop on-line and off-line fault diagnosis and prognosis methods. Our approach is to develop functional dependency models between the failure modes and the concomitant monitoring mechanisms, which form the basis for failure modes, effects and criticality analysis, design for testability, diagnostic inference, and the remaining useful life estimation of (hardware) components. Over the last few years, the electronic explosion in automotive vehicles and other application domains has significantly increased the complexity, heterogeneity, and interconnectedness of embedded systems. To address the cross-subsystem malfunction phenomena in such networked systems, it is essential to develop a common methodology that: (i) identifies the potential failure modes associated with software, hardware, and hardware-software interfaces; (ii) generates functional dependencies between the failure modes and tests; (iii) provides an on-line/off-line diagnosis system; (iv) computes the remaining useful life estimates of components based on the diagnosis; and (iv) validates the diagnostic and prognostic inference methods via fault injection prior to deployment in the field. The development of functional dependency models and diagnostic inference from these models to aid in online and remote diagnosis and prognosis of embedded systems is a potentially novel aspect of this effort. This project seeks to improve the competitiveness of the U.S. automotive industry by enhancing vehicle reliability, performance and safety, and by improving customer satisfaction. Other representative applications include aerospace systems, electrification of transportation, medical equipment, and communication and power networks, to name a few.