In this paper, a fault-tolerant control method is developed for actuator and component faults. Its principle is based on the on-line nonlinear estimation of a quantity which is equal to zero in the fault-free case and equal to the fault-magnitude when a fault occurs on the system. This estimation is computed from an extended Kalman filter used as an observer. The interest of the method is to consider a nonlinear model of the system, controlled with an exact linearization input-output by state feedback. Then a new control law is added to the nominal one in order to compensate the fault effect on the system. The performances of the method are tested in simulation on a hydraulic system.