Combining a simplified on-board turbo-shaft model with sensor fault diagnostic logic, a model-based sensor fault diagnosis method is proposed. The existing fault diagnosis method for turbo-shaft engine key sensors is mainly based on a double redundancies technique, and this can’t be satisfied in some occasions as lack of judgment. The simplified on-board model provides the analytical third channel against which the dual channel measurements are compared, while the hardware redundancy will increase the structure complexity and weight. The simplified turbo-shaft model contains the gas generator model and the power turbine model with loads, this is built up via dynamic parameters method. Sensor fault detection, diagnosis (FDD) logic is designed, and two types of sensor failures, such as the step faults and the drift faults, are simulated. When the discrepancy among the triplex channels exceeds a tolerance level, the fault diagnosis logic determines the cause of the difference. Through this approach, the sensor fault diagnosis system achieves the objectives of anomaly detection, sensor fault diagnosis and redundancy recovery. Finally, experiments on this method are carried out on a turbo-shaft engine, and two types of faults under different channel combinations are presented. The experimental results show that the proposed method for sensor fault diagnostics is efficient.