A unifying framework for observer design by eigenstructure assignment is described. A new technique for structured residual generation, based on this framework, is proposed. One of the main features of this technique is that the equivalence between residual generation by means of observers or parity space devices are made conspicuous. More precisely, from a computational point of view, the equations to solve in both cases are shown to be similar, and for implementation, both devices are shown to be identical. A necessary and sufficient condition for the existence of structured residuals is given. Finally the sensitivity of structured residuals to nondecoupled failures is studied and a procedure for maximizing this sensitivity is described.