Photovoltaic (PV) stations have been widely built in the world to utilize solar energy directly. In order to reduce the capital and operational costs, early fault diagnosis is playing an increasingly important role by enabling the long effective operation of PV arrays. This paper analyzes the terminal characteristics of faulty PV strings and arrays, and it develops a PV array fault diagnosis technique. The terminal current-voltage curve of a faulty PV array is divided into two sections, i.e., high-voltage and low-voltage fault diagnosis sections. The corresponding working points of healthy string modules and of healthy and faulty modules in an unhealthy string are then analyzed for each section. By probing into different working points, a faulty PV module can be located. The fault information is of critical importance for the maximum power point tracking and the array dynamical reconfiguration. Furthermore, the string current sensors can be eliminated, and the number of voltage sensors can be reduced by optimizing voltage sensor locations. Typical fault scenarios including monostring, multistring, and a partial shadow for a 1.6-kW 3 $times$ 3 PV array are presented and experimentally tested to confirm the effectiveness of the proposed fault diagnosis method.