During the movement of segment winding permanent magnet linear synchronous motor (SWPMLSM), the loss of sensor signal may lead to sharp fluctuations in speed, and result in out of step. In order to solve these problems, a fault diagnosis and faulttolerant control method is presented. The detection method of winding switching position is designed. The fault types and signal characteristics of the proximity sensors are studied. By using the speed of mover and the signals of the adjacent position sensors, the sensor state is predicted. The fault diagnosis of sensor is realized by using the edge triggering sequence of adjacent sensors and the predictive value of sensor state. When the position sensor fault is detected, the control system isolates the fault sensor. The stator winding of the SWPMLSM is successfully triggered by the estimated value instead of the fault sensor signal. The experimental tests have been carried out on a prototype of SWPMLSM ropeless lifting system. The results show that when the sensor gap is increased, the sensor signal is lost, the stator windings of the motor can be switched reliably and the speed is stable. The position sensor fault diagnosis and faulttolerant control method can satisfy the realtime and reliability requirements of SWPMLSM winding switching control, and the experimental results prove its feasibility and effectiveness.