System performance and reliability, given a sensor failure, can be improved by the use of multiple sensors of different types. A failure may be due to loss of information of any type. In order to use multiple sensors, it is necessary to perform local estimation, combine local estimations in a central processor, and to detect, isolate, and accommodate sensor failures. Methods for attacking these problems are generally known as sensor fusion. The general sensor fusion equations are set up showing how to construct local estimators, the central processing (fusing) algorithm, and "outer logic" for dealing with sensor failure. In addition application of the theory is demonstrated through simulation, with generic sensors employing non-linear models. The results show the detection, isolation and accommodation of sensor failures. Based upon this study, the concept of sensor fusion shows promise in making significant improvement in many systems employing multiple sensors.