A diagnostic process applicable to VLSI designs to address the accuracy of diagnostic resolution. Environmentally based fail data drives adaptive test methods which hone the test pattern set and fail data collection for successful diagnostic resolution. Environmentally based fail data is used in diagnostic simulation to achieve a more accurate environmentally based fault callout. When needed, additional information is included in the process to further refine and define the simulation or callout result. Similarly, as needed adaptive test pattern generation methods are employed to result in enhanced diagnostic resolution.