Networked systems present some key new challenges in the development of fault-diagnosis architectures. This paper proposes a novel distributed networked fault detection methodology for large-scale interconnected systems. The proposed formulation incorporates a synchronization methodology with a filtering approach in order to reduce the effect of measurement noise and time delays on the fault detection performance. The proposed approach allows the monitoring of multirate systems, where asynchronous and delayed measurements are available. This is achieved through the development of a virtual sensor scheme with a model-based resynchronization algorithm and a delay compensation strategy for distributed fault-diagnostic units. The monitoring architecture exploits an adaptive approximator with learning capabilities for handling uncertainties in the interconnection dynamics. A consensus-based estimator with time-varying weights is introduced, for improving fault detectability in the case of variables shared among more than one subsystem. Furthermore, time-varying threshold functions are designed to prevent false-positive alarms. Analytical fault detectability sufficient conditions are derived, and extensive simulation results are presented to illustrate the effectiveness of the distributed fault detection technique.@en