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Fault tolerance is gaining interest as a means to increase the reliability and availability of distributed energy systems. In this paper, a voltage-oriented doubly fed induction generator, which is often used in wind turbines, is examined. Furthermore, current, voltage, and position sensor fault detection, isolation, and reconfiguration are presented. Machine operation is not interrupted. A bank of observers provides residuals for fault detection and replacement signals for the reconfiguration. Control is temporarily switched from closed loop into open-loop to decouple the drive from faulty sensor readings. During a short period of open-loop operation, the fault is isolated using parity equations. Replacement signals from observers are used to reconfigure the drive and reenter closed-loop control. There are no large transients in the current. Measurement results and stability analysis show good results.