Multivariable stochastic degradation system (MSDS) is quite common in indus-tries such as blast furnace ironmaking, vehicle transportation, and aerospace manufacturing. Large-scale complex equipments may be affected by multiple factors, resulting in not just a single deteriorating performance characteristic. It is difficult to handle unknown failure structures of practical systems by using traditional univariate degradation modeling methods. A novel health index (HI) is constructed to quantitatively analyze the health state for the overall system. Considering the interaction between internal reactions and external environments, the fractional Brownian motion (FBM), a typical non-Markovian diffusion process, is added for the purpose of reflecting stochastic uncertainties and memory effects. Based on the wavelet estimators and the maximum likelihood estimation (MLE) algorithm, multi-sensor observations of degradation variables are analyzed simultaneously to identify model parameters. A closed-form distribution of system-level remaining useful life (RUL) is obtained with a mild two-layer approximation. Relevant case studies are then handled that adequately demonstrate the effectiveness and the practical utility of the proposed method.