Due to their size and complexity, it is very difficult to make diagnostic system for the whole chemical processes. Therefore, a systematic approach is required to decompose larpge-scale process into sub-processes and then diagnose them. This paper suggests a method for the minimization of knowledge base and flexible diagnosis to be used in qualitative fault diagnosis based on Fault-Effect Tree model. The system can be decomposed for flexible diagnosis, size reduction of knowledge base, and consistent construction of complex knowledge base. The new node, gate-variable, is introduced to connect the cause-effect relationships of each sub-process. For on-line diagnosis, off-line analysis is performed to construct Fault-Effect Trees of gate-variables as well as activation conditions of gate-variables. On-line diagnosis strategy is modified to get the same diagnosis result without system decomposition. The proposed method is illustrated with a fault diagnosis system for a large-scale boiler plant.