An observer-based fault tolerant control (FTC) method is proposed for constrained switched systems (CSS) with input constraints. A family of Lyapunov-based bounded controllers are designed to ensure that, whenever actuator faults occur at the dwell time period of each continuous mode, the mode is always within its corresponding stability region. A set of switching laws are designed to guarantee the asymptotic stability of the overall CSS. The fixed stability regions on which the FTC method is based are also relaxed by the proposed variable stability regions. An example of CPU processing illustrates the effectiveness of proposed method.