The invention provides a method for on-line fault diagnosis and fault-tolerant control of position signals of a switch reluctance motor. A position sensor detects the rotation position of a three-phase 12/8 pole rotor in real time, the relative position of the rotor of the motor is determined according to a built-up sequence of three paths of feedback position signals and a trigger edge, then a position angle q of the rotor is calculated, and by combination with a current energizing phase, fault position signals and fault types can be diagnosed in an on-line mode; under the fault state, invalid phase changing actions are rebuilt, correct phase changing operations are conducted, fault tolerance and recovery control over the position signals are conducted, the continuous operation of the motor after the fault is achieved, and the correct cut-in of the position signals when the fault recovery is performed is achieved. The method is convenient to achieve and reliable in operation, in the diagnosis process, the rotor position angle q is amended in each rotor angle cycle, an accumulative error can not be produced, and the accumulative influence on the output performance of a system does not exist; the method can diagnose the fault position signals and the fault types in the on-line mode and enable the system to rapidly recover normal stable operation, and the reliability of the system is improved.