In this paper, a fault detection scheme for DC-link voltage sensor and its fault tolerant control strategy for three-phase AC/DC/AC PWM converters are proposed, where the Luenberger observer is applied to estimate the DC-link voltage. The Luenberger observer is based on a converter model, which is derived from the voltage equations of a grid-side converter and the power balance on a DC link. A fault of the voltage sensor is detected by comparing the measured value of the DC-link voltage with the estimated one. When a sensor fault is detected, a fault tolerant control strategy is performed, where the estimated DC-link voltage is used for the feedback control. The estimation error from the observer is about 1.5 V, which is sufficiently accurate for feedback control. In addition, it is shown that the observer performance is robust to parameter variations of the converter. The validity of the proposed method has been verified by simulation and experimental results.