A challenging problem in aircraft engine health management (EHM) system development is to detect and isolate faults in system components (i.e., compressor, turbine), actuators, and sensors. Existing nonlinear EHM methods often deal with component faults, actuator faults, and sensor faults separately, which may potentially lead to incorrect diagnostic decisions and unnecessary maintenance. Therefore, it would be ideal to address sensor faults, actuator faults, and component faults under one unified framework. This paper presents a systematic and unified nonlinear adaptive framework for detecting and isolating sensor faults, actuator faults, and component faults for aircraft engines. The fault detection and isolation (FDI) architecture consists of a parallel bank of nonlinear adaptive estimators. Adaptive thresholds are appropriately designed such that, in the presence of a particular fault, all components of the residual generated by the adaptive estimator corresponding to the actual fault type remain below their thresholds. If the faults are sufficiently different, then at least one component of the residual generated by each remaining adaptive estimator should exceed its threshold. Therefore, based on the specific response of the residuals, sensor faults, actuator faults, and component faults can be isolated. The effectiveness of the approach was evaluated using the NASA C-MAPSS turbofan engine model, and simulation results are presented.