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In this paper, the fault detection problem for nonlinear networked control systems (NCSs) with packet dropout and delay is investigated. A nonlinear stochastic systems model is proposed to account for the NCSs with random packet dropout and network-induced time-varying delay in both from sensor to controller (S/C) and from controller to actuator (C/A). Based on the obtained NCSs model, employing observer-based fault detection filter as residual generator, the addressed fault detection problem is converted into an auxiliary nonlinear H∞ control problem. Then, with the help of Lyapunov-Krasovskii functional approach, a sufficient condition for the desired fault detection filter is constructed in terms of certain linear matrix inequalities, which depend on not only delay interval but also on delay interval occurrence rate and successful packet communication rate. Especially, a trade-off phenomenon between the allowable delay bound and successful data packet transmission rate is found, which is typically resulted from limited bandwidth of communication networks. The effectiveness of proposed method is demonstrated by simulation example.