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Abstract Because of uncertain random noise and unknown disturbance, the observer‐based inverter fault diagnosis meets the problems of large deviation of current observation value and high false alarm rate. An inverter open‐circuit fault diagnosis method is proposed via residual performance evaluation. Firstly, the interval sliding mode observer is constructed by combining the interval observer with the sliding mode observer. Three phase current estimates are obtained and current residuals are calculated. Secondly, the residual performance indicators are calculated using the evaluation function. The fault detection is derived by comparing residual performance with the threshold. Thirdly, a residual information table is established based on the fault information contained in the residual for fault isolation. Finally, the proposed algorithm is validated on simulation and physical platforms. Compared with traditional observer‐based diagnostic methods, the introduction of residual performance evaluation improves the diagnostic speed by more than 50%. The interval sliding mode observer has higher estimation accuracy and anti‐interference ability in the presence of noise and external disturbances.