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For dynamic systems with actuator faults, sensor faults, input disturbances, and measurement noises, a novel high-gain estimation technique is presented in this paper to estimate system states, actuator faults, and sensor faults simultaneously. The key idea is to represent faults as auxiliary system states so that a descriptor system representation can be formulated. By using the estimated state and fault signals, a fault-tolerant controller design approach is developed, where the closed-loop dynamic system can still be guaranteed to operate normally when actuator and sensor faults occur. It has been shown that in the proposed design framework, the actuator fault, sensor fault, input disturbance, and measurement noise can appear simultaneously and can be allowed to be in different bounded forms. Finally, the proposed algorithm is applied to the simulation study of a three-shaft gas turbine system and desired results have been obtained.