This paper presents a disturbance decoupled fault reconstruction (DDFR) scheme using cascaded sliding mode observers. The processed signals from an observer are found to be the output of a fictitious system which treats the faults and disturbances as inputs; the ‘outputs’ are then fed into the next observer. This process is repeated until a fictitious system which satisfies the conditions that guarantee DDFR is attained. It is found that the scheme in this paper is less restrictive and that it enables DDFR for a wider class of systems compared to previous work when only one or two observers were used. This paper also presents a systematic routine to design the DDFR scheme. A design example verifies its effectiveness.