Cascaded H-bridge (CHB) based converters have several advantages including modularity, isolated DC-side voltage, and improved output voltage quality. These multilevel converters are increasingly used in photovoltaic (PV) systems. With the number of H-bridge submodules (SM) and sensors increased due to the cascaded topology, the converter becomes more prone to sensor malfunctions. This article proposes a method to make a CHB-based PV converter resilient to sensor malfunctions using a real-time state estimation-based malfunction detection algorithm. The proposed method is validated using simulation studies in MATLAB/SIMULINK and experimental studies on a test system. It is shown that a nine-level CHB-based PV system can operate normally even when one sensor measurement is missing.