To develop a liquid rocket engine with high reliability and safety under constraints of limited time and budget an optimal diagnosis system for the engine needs to be developed in parallel with the development of the engine. This paper is intended to set a development direction of the diagnosis system for the liquid rocket engine through the literature survey and addresses possible engine defects, characteristics of parameters for diagnosis and diagnostic methods including real-time diagnosis, post-test/post-flight diagnosis, fault detection method, parameter circuit method and test diagnosis. In addition tasks to be performed in the design and operation phases of the engine and foreign application case of engine diagnosis are presented.