Directional drilling rig in order to improve one thousand meters MWD system stability, this paper explores the mechanism of the MWD system failure, and develops of a set of fault diagnosis device based on embedded system. The device microcontroller for control core UCOS-Ⅱ is a software architecture. The fault is displayed on the host computer by the way of graphics and test, which is diggnosed by the key paprmeters in the real-time collection system. And by way of graphics and text displayed on the host computer. The results show that the device can effectively diagnose system failures.