A computer-implemented method for diagnosing system faults by fine-grained causal anomaly inference is presented. The computer-implemented method includes identifying functional modules impacted by causal anomalies and backtracking causal anomalies in impaired functional modules by a low-rank network diffusion model. An invariant network and a broken network are inputted into the system, the invariant network and the broken network being jointly clustered to learn a degree of broken severities of different clusters as a result of fault propagations.