This paper considers the observer-based fault detection and isolation design problems when the observer matching condition is not satisfied. Based on the relative degree concept, an auxiliary output vector that may satisfy the observer matching condition is constructed. Since the auxiliary output vector contains unknown information, we use a high-order high-gain sliding-mode observer to exactly estimate not only the auxiliary outputs, but also their derivatives in a finite time. Then, an adaptive robust full-order observer is developed to serve as an actuator fault detection observer. For the actuator fault reconstruction purpose, a reduced-order observer is proposed to estimate the system states even if there are some actuator faults and an actuator fault reconstruction method is provided to reach the fault isolation purpose. A numerical simulation example is used to illustrate the effectiveness of the proposed methods.