The concept of qualitative modeling is briefly described. This paper focuses on the use of signed directed graphs to model fault propagation in process plants. It is common to use a unit-based approach for modeling. Two kinds of problems, which arise when constructing unit-based qualitative models, are identified: (1) The models are difficult to construct. (2) Ambiguities due to multiple causal paths may occur when the models are combined. A method that allows models to be built simply and correctly is proposed. The method incorporates features from the knowledge acquisition field, and a computer-aided modeling tool, Equipment Model Builder, has been built to support this method. A new modular approach is presented which overcomes the problem of ambiguous inference when qualitative models are combined. Two case studies were used to evaluate the method developed and the support tool.