The technology used in wave energy conversion systems is still in the early stages of research and development. There are a number of challenges associated with becoming a commercially viable source of renewable energy due to the high operating and maintenance (O&M) costs. A potential solution for increasing the availability of wave energy converters (WECs) and reducing operating and maintenance costs might involve the implementation of condition monitoring and fault-tolerant control systems, because in some reported WEC systems, 57% of total operational expenses go to maintenance activities. The use of condition monitoring techniques in wind energy systems has, for instance, shown the ability to detect failures months in advance, resulting in savings of 15–20% during the operational phase. This paper reviews the methods proposed (and some used) by researchers to monitor WEC’s condition and diagnose faults. Fault-tolerant control methods developed to improve the reliability of WECs and hence their commercial viability are also reviewed and discussed. In addition, a future research plan is provided here.