Since failure analysis (FA) tools originated in the design-for-test (DFT) realm, most have abstractions that reflect a designer's viewpoint. These abstractions prevent easy application of diagnosis results in the physical world of the FA lab. This article presents a fault diagnosis system, DFS/FA, which bridges the DFT and FA worlds. First, it describes the motivation for building DFS/FA and how it is an improvement over off-the-shelf tools and explains the DFS/FA building blocks on which the diagnosis tool depends. The article then discusses the diagnosis algorithm in detail and provides an overview of some of the supporting tools that make DFS/FA a complete solution for FA. It also presents a FA example where DFS/FA has been applied. The example demonstrates how the consideration of physical proximity improves the accuracy without sacrificing precision.