Emerging applications of autonomous robots requiring stability and reliability cannot afford component failure to achieve operational objectives. Hence, identification and countermeasure of a fault is of utmost importance in mechatronics community. This research proposes a Fault-tolerant control (FTC) for a robot manipulator, which is based on a hybrid control scheme that uses an observer as well as a hardware redundancy strategy to improve the performance and efficiency in the presence of actuator and sensor faults. Considering a five Degree of Freedom (DoF) robotic manipulator, a dynamic LuGre friction model is derived which forms the basis for design of control law. For actuator's and sensor's FTC, an adaptive back-stepping methodology is used for fault estimation and the nominal control law is used for the controller reconfiguration and observer is designed. Fault detection is accomplished by comparing the actual and observed states, pursued by fault tolerant method using redundant sensors. The results affirm the effectiveness of the proposed FTC strategy with model-based friction compensation. Improved tracking performance as well robustness in the presence of friction and fault demonstrate the efficiency of the proposed control approach.