Fault localization plays a significant role in enormous distributed system because it can identify root cause of observed faults automatically, supporting self-managing which remains an open topic in managing and controlling complex distributed systems to improve system reliability. Although many Artificial Intelligent techniques have been introduced in support of fault localization in recent research especially in increasing complex ubiquitous environment, the provided functions such as diagnosis and prediction are limited. In this paper, we propose fault localization for self-managing in performance evaluation in order to improve system reliability via learning and analyzing real-time streams of system performance events. We use probabilistic reasoning functions based on the basic Bayes' rule to provide effective mechanism for managing and evaluating system performance parameters automatically, and hence the system reliability is improved. Moreover, due to large number of considered factors in diverse and complex fault reasoning domains, we develop an efficient method which extracts relevant parameters having high relationships with observing problems and ranks them orderly. The selected node ordering lists will be used in network modeling, and hence improving learning efficiency. Using the approach enables us to diagnose the most probable causal factor with responsibility for the underlying performance problems and predict system situation to avoid potential abnormities via posting treatments or pretreatments respectively. The experimental application of system performance analysis by using the proposed approach and various estimations on efficiency and accuracy show that the availability of the proposed approach in performance evaluation domain is optimistic.