<p>Fault estimation for distributed interconnected systems is an interesting but challenging topic that needs to be solved fully. In this study, for distributed dynamic systems with sensor faults, the original system is converted to an augmented descriptor system by including the sensor fault vector as a part of the augmented state vector. An augmented state estimator is then designed for the augmented system whose state vector is composed of system states and sensor faults, therefore a simultaneous estimation of system states and sensor faults for the interconnected system can be achieved. Sliding mode technique is used to alleviate the influence from unknown input uncertainties on the system dynamics, and the stability condition of the estimation error dynamics is presented. Finally, the effectiveness of the proposed method is validated by using numeric examples of linear and nonlinear interconnected system models. Comparative studies are also carried out to demonstrate the advantages of the proposed design algorithm.</p>