This paper presents a control scheme for handling sensing failures (sensor malfunctions, significant degradations in performance due to changes in the environment, and errant expectations) in sensor fusion for autonomous mobile robots. The advantages of the exception handling mechanism are that it emphasizes a fast response to sensing failures, is able to use only a partial causal model of sensing failure, and leads to a graceful degradation of sensing if the sensing failure cannot be compensated for. The exception handling mechanism consists of two modules: error classification and error recovery. The error classification module in the exception handler attempts to classify the type and source(s) of the error using a modified generate-and-test procedure. If the source of the error is isolated, the error recovery module examines its cache of recovery schemes, which either repair or replace the current sensing configuration. If the failure is due to an error in expectation or cannot be identified, the planner is alerted. Experiments using actual sensor data collected by the CSM Mobile Robotics/Machine Perception Laboratory's Denning mobile robot demonstrate the operation of the exception handling mechanism.