The fault detection (FD) problem for systems with both model uncertainty and external disturbance is investigated in this article. First, the mathematical models of systems with model uncertainty and disturbance, systems with additive faults, and systems with multiplicative faults are established with both left and right coprime factorization. Then, an observer-based FD scheme is proposed and the FD thresholds are derived for both open-loop and closed-loop manners. The necessary conditions on multiplicative FD are obtained and the fault detectability analyses are carried out with the aid of the gap metric technique. Finally, the effectiveness of the proposed method is illustrated by a case study on a cart dynamic system.