Chemical process plant safety, production specifications, environmental regulations, operational constraints, and plant economics are some of the main reasons driving an upward interest in research and development of more robust methods for process monitoring and control. Principal component analysis (PCA) has long been used in fault detection by extracting relevant information from multivariate chemical data. The recent success of wavelets and multi-scale methods in chemical process monitoring and control has catalyzed an interest in the investigation of wavelets based methods for fault detection. In the present work, multi-scale principal component analysis (MSPCA) is used for fault detection and diagnosis. MSPCA simultaneously extracts both, cross correlation across the sensors (PCA approach) and auto-correlation within a sensor (wavelet approach). Using wavelets, the individual sensor signals are decomposed into approximations and details at different scales. Contributions from each scale are collected in separate matrices, and a PCA model is then constructed to extract correlation at each scale. The multi-scale nature of MSPCA formulation makes it suitable to work with process data that are typically non-stationary and represent the cumulative effect of many underlying process phenomena, each operating at a different scale. The proposed MSPCA approach is able to outperform the conventional PCA based approach in detecting and identifying real process faults in an industrial process, and yields minimum false alarms. Additionally, the advantage of MSPCA, over the traditional PCA approach for sensor validation, is also demonstrated on an industrial boiler data set.