The purpose of this study is to develop a method for detecting and compensating the anomalies of continuous glucose monitoring (CGM) sensors as well as detecting unannounced meals. Both features, sensor fault detection/correction and meal detection, are necessary to have a reliable artificial pancreas. The aim is to investigate the best detection results achievable with the proposed detection configuration in a perfect situation, and to have the results as a benchmark against which the imperfect scenarios of the proposed fault detection can be compared. The perfect situation that we set up here is in terms of a patient simulation model, where the model in the detector is the same as the patient simulation model used for evaluation of the detector. The detection module consists of two CGM sensors, two fault detectors, a fault isolator, and an adaptive unscented Kalman filter (UKF). Two types of sensor faults, i.e., drift and pressure induced sensor attenuation (PISA), are simulated by a Gaussian random walk model. Each of the fault detectors has a local UKF that receives the signal from the associated sensor, detects faults, and finally tunes the adaptive UKF. A fault isolator that accepts data from the two fault detectors differentiates between a sensor fault and an unannounced meal appearing as an anomaly in the CGM data. If the fault isolator indicates a sensor fault, a method based on the covariance matching technique tunes the covariance of the measurement noise associated with the faulty sensor. The main UKF uses the tuned noise covariances and fuses the CGM data from the two sensors. The drift detection sensitivity and specificity are 80.9% and 92.6%, respectively. The sensitivity and specificity of PISA detection are 78.1% and 82.7%, respectively. The fault detectors can detect 100 out of 100 simulated drifts and 485 out of 500 simulated PISA events. Compared to a nonadaptive UKF, the adaptive UKF reduces the deviation of the CGM measurements from their paired blood glucose concentrations from 72.0% to 12.5% when CGM is corrupted by drift, and from 10.7% to 6.8% when CGM is corrupted by PISA. The fault isolator can detect 199 out of 200 unannounced meals. The average change in the glucose concentrations between the meals and the detection time points is 46.3 mg/dL.