This paper presents a diagnosis scheme based on a linear matrix inequality (LMI) algorithm for incipient faults in a nonlinear system class with unknown input disturbances. First, the nonlinear system is transformed into two subsystems, one of which is unrelated to the disturbances. Second, for the subsystem that is free from disturbances, a Luenberger observer is constructed; a sliding mode observer is then constructed for the subsystem which is subjected to disturbances, so that the effect of the unknown input disturbances is eliminated. Together, the entire system achieves both robustness to disturbances and sensitivity to incipient faults. Finally, the effectiveness and feasibility of the proposed method are verified through a numerical example using a single-link robotic arm.