In this paper, we propose an AFDO (Adaptive Fault Diagnosis Observer) and a fault tolerant controller for a class of nonlinear continuous-time system under the nonlinear abrupt actuator faults. Together with its estimation laws, the AFDO which estimates that the actuator faults is designed by using the Lyapunov analysis. Then, based on the designed AFDO, an adaptive sliding mode controller is proposed as the fault tolerant controller. Using Lyapunov stability analysis, we also prove the uniform boundedness of the state, the output and the fault estimation errors, and the asymptotic stability of the tracking error under the nonlinear time-varying faults. Finally, we illustrate the effectiveness of the proposed diagnosis method and the control scheme thorough computer simulations.