This paper proposes fault-tolerant control design for uncertain nonlinear systems described under Takagi-Sugeno fuzzy systems with local nonlinear models that satisfy the Lipschitz condition. First, by transforming sensor faults as ‘pseudo-actuator’ faults, an adaptive sliding mode observer is designed in order to simultaneously estimate system states, actuator and sensor faults despite the presence of norm-bounded uncertainties. Second, an adaptive sliding mode controller is suggested to provide a solution to stabilize the closed-loop system, even in the event of simultaneous occurrence of faults in actuators and sensors. Next, the main objective of the fault-tolerant control strategy is to compensate for the effects of fault based on the feedback information. Therefore, using the LMI optimization method, sufficient conditions are developed with [Formula: see text] to calculate the gains of the observer and the controller. Then, particular attention is paid to the simultaneous maximization, by convex multi-objective optimization, of the Lipschitz nonlinear constant in Takagi-Sugeno fuzzy modelling and uncertainties attenuation level. The results of the simulation illustrate the effectiveness of our fault-tolerant control approach using a nonlinear inverted pendulum with a cart system.