As missing sensor data may severely degrade the overall system performance and stability, reliable state estimation is of great importance in modern data-intensive control, computing, and power systems applications. Aiming at providing a more robust and resilient state estimation technique, this paper presents a novel second-order fault-tolerant extended Kalman filter estimation framework for discrete-time stochastic nonlinear systems under sensor failures, bounded observer-gain perturbation, extraneous noise, and external disturbances condition. The failure mechanism of multiple sensors is assumed to be independent of each other with various malfunction rates. The proposed approach is a locally unbiased, minimum estimation error covariance based nonlinear observer designed for dynamic state estimation under these conditions. It has been successfully applied to a benchmark target-trajectory tracking application. Computer simulation studies have demonstrated that the proposed second-order fault-tolerant extended Kalman filter provides more accurate estimation results, in comparison with traditional first- and second-order extended Kalman filter. Experimental results have demonstrated that the proposed second-order fault-tolerant extended Kalman filter can serve as a powerful alternative to the existing nonlinear estimation approaches.