In this paper, a hybrid fault detection and isolation (FDI) methodology is developed for a team of cooperating unmanned vehicles. The proposed approach takes advantage of the cooperative nature of the team to detect and isolate relatively low-severity actuator faults that are otherwise not detectable and isolable by the vehicles themselves individually. The approach is hybrid and consists of both low-level (agent/team level) and high-level [discrete-event systems (DES) level] FDI modules. The high-level FDI module is formulated in the DES supervisory control framework, whereas the low-level FDI module invokes classical FDI techniques. By properly integrating the two FDI modules, a larger class of faults can be detected and isolated as compared to the existing techniques in the literature that rely on each level separately. Simulation results for a team of five unmanned aerial vehicles are also presented to demonstrate the effectiveness and capabilities of our proposed methodology.