Wavelet neural network, the integration of wavelet analysis and neural network, is presented to diagnose the faults of sensors including temperature, flow rate and pressure in variable air volume (VAV) systems to ensure well capacity of energy conservation. Wavelet analysis is used to process the original data collected from the building automation first. With three-level wavelet decomposition. the series of characteristic information representing various operation conditions of the system are obtained. In addition, neural network is developed to diagnose the source of the fault. To improve the diagnosis efficiency, three data groups based on several physical models or balances are classified and constructed. Using the data decomposed by three-level wavelet, the neural network can be well trained and series of convergent networks are obtained. Finally, the new measurements to diagnose are similarly processed by wavelet. And the well-trained convergent neural networks are used to identify the operation condition and isolate the source of the fault. (C) 2009 Elsevier Ltd. All rights reserved.