The development of health monitoring technology for liquid rocket engines (LREs) can effectively improve the safety and reliability of launch vehicles, which has important theoretical and engineering significance. Therefore, we propose a fault detection and diagnosis (FDD) method for a large LOX/kerosene rocket engine based on long short-term memory (LSTM) and generative adversarial networks (GANs). Specifically, we first modeled a large LOX/kerosene rocket engine using MATLAB/Simulink and simulated the engine’s normal and fault operation states involving various startup and steady-state stages utilizing fault injection. Second, we created an LSTM-GAN model trained with normal operating data using LSTM as the generator and a multilayer perceptron (MLP) as the discriminator. Third, the test data were input into the discriminator to obtain the discrimination results and realize fault detection. Finally, the test data were input into the generator to obtain the predicted samples and calculate the absolute error between the predicted and the real value of each parameter. Then the fault diagnosis index, standardized absolute error (SAE), was constructed. SAE was analyzed to realize fault diagnosis. The simulated results highlight that the proposed method effectively detects faults in the startup and steady-state processes, and diagnoses the faults in the steady-state process without missing an alarm or being affected by false alarms. Compared with the conventional redline cut-off system (RCS), adaptive threshold algorithm (ATA), and support vector machine (SVM), the fault detection process of LSTM-GAN is more concise and more timely.