AbstractThe mathematical foundations of model-based diagnostics or diagnosis from first principles have been laid by Reiter (1987). In this paper we extend Reiter's ideas of model-based diagnostics by introducing probabilities into Reiter's framework. This is done in a mathematically sound and precise way which allows one to compute the posterior probability that a certain component is not working correctly given some observations of the system. A straightforward computation of these probabilities is not efficient and in this paper we propose a new method to solve this problem. Our method is logic-based and borrows ideas from assumption-based reasoning and ATMS. We show how it is possible to determine arguments in favor of the hypothesis th...