In this paper the problem of fault diagnosis in an aircraft jet engine is investigated by using an intelligent-based methodology. The proposed fault detection and isolation (FDI) scheme is based on the multiple model approach and utilizes autoassociative neural networks (AANNs). This methodology consists of a bank of AANNs and provides a novel integrated solution to the problem of both sensor and component fault detection and isolation even though possibly both engine and sensor faults may occur concurrently. Moreover, the proposed algorithm can be used for sensor data validation and correction as the first step for health monitoring of jet engines. We have also presented a comparison between our proposed approach and another commonly used neural network scheme known as dynamic neural networks to demonstrate the advantages and capabilities of our approach. Various simulations are carried out to demonstrate the performance capabilities of our proposed fault detection and isolation scheme.