Provided are a fault model and rule based fault management apparatus and method for a home network. The fault management apparatus includes: a plurality of fault generation unit formed in a multilevel structure and generating fault notification when a fault is generated; a plurality of fault communication unit for transferring fault notification from one of the fault generation unit; a fault agent unit for transferring each fault notification from a plurality of the fault communication unit; and a fault diagnosis and process unit for receiving the fault notification from the fault agent unit, diagnosing a corresponding fault, and processing the corresponding fault using a fault model, a fault decision rule, and a fault process rule.