A review of advanced fault detection and diagnosis (FDD) techniques in attitude control systems (ACSs) of spacecraft is presented. In the first part of the paper, several types of ACS failure scenarios with their practical solutions are presented. Next, the existing approaches to FDD are considered and classified based on different criteria, including applications and design techniques. The literature of this part showed that to enhance ACS operational safety, predictability of failure of an ACS and/or of its components as well as reducing the possibility of failure occurrence is imperative. In addition, fast FDD of various kinds of failures is necessary to guarantee the required reliability of an ACS. The second part of this study highlights challenges involved with different FDD approaches, emphasizing their practical applicability. Current research gaps in FDD techniques such as insensitive residual signal, process monitoring methods, accurate plant model design, easy-to-use software development, FDD tuning process, dealing with noisy sensor measurements, time taken for fault management, the sensitivity of FDD system to faults, and FDD robustness are further elaborated on. Subsequently, the state-of-the-art FDD and its future needs are reflected on. The results of this study could direct spacecraft manufacturers and ACS providers to focus on future needs and improve ground testing for enhanced operational reliability and redundancy.