A 2.5 m diameter centrifuge is presently being developed by the Japan Aerospace Exploration Agency (JAXA) for installation on the International Space Station (ISS). While this will enable biological experiments at variable gravity levels, if an imbalance in the large rotating mass of the centrifuge rotor is allowed to persist, it will cause vibrations that disturb the micro-gravity environment of the ISS. This paper presents an approach for automatic balancing and intelligent fault tolerance. It has been developed and tested in simulation on a model of an early centrifuge design prototype developed at NASA Ames Research Center. The high fidelity automatic balancing system (ABS) can sense the imbalance (both static and dynamic) and drive counterweights to minimize the effects of the imbalance. The algorithm consists of an on-line recursive least-squares (RLS) based imbalance estimator which outputs to a simple counterweight control system. The sensor fault detection, isolation, and reconfiguration (FDIR) system uses a maximum likelihood approach. The counterweight FDIR performs a simple check of the encoder and motion commands to detect sticking or skipping. These systems are developed and tested in MATLAB simulation. Extension of these algorithms for application on the present design of the ISS Centrifuge is straightforward and could result in a high performance and autonomously fault-tolerant ABS. Nomenclature A-[matrix] a matrix in the general formulation of the LS problem, Ax b ≅ .