The Drilling Automation for Mars Environment (DAME) project, led by NASA Ames Research Center, is aimed at developing a lightweight, low-power drill prototype that can be mounted on a Mars lander and be capable of drilling down several meters below the Mars surface for conducting geology and astrobiology research. The DAME drill system incorporates a large degree of autonomy -from quick diagnosis of system state and fault conditions to taking the appropriate recovery actions -while also striving to achieve as many of the operational objectives as possible. This paper outlines, on a general level, the overall DAME architecture, equipment, and autonomy package. The main focus, however, is on describing the model-based fault detection and diagnosis system, including the modeling approach, the fault modes handled, and the diagnostic algorithms.