The emergence of networked embedded systems and sensor/actuator networks has made possible the development of advanced monitoring and control applications where a large amount of real-time data is collected from distributed systems and processed to activate the appropriate actuators and achieve the desired control objectives. One of the key challenges in the upcoming years is the development of hierarchical control and fault diagnostic systems for dealing with complex, distributed and uncertain dynamics. Motivated by three case studies, the proposed HERONS project aims to develop algorithms and concepts for hierarchical control and fault diagnosis of distributed systems. The three case studies for hierarchical control and fault diagnosis provided by the four industrial partners are: (a) coordination control of autonomous vehicles (underwater, land vehicles); (b) hierarchical control of road networks; and (c) robust supervisory control of high-tech systems (complex printers, MRI scanners). The design of control and fault diagnosis systems for these case studies will be investigated from four different perspectives: (i) control synthesis of hierarchical and distributed systems; (ii) development of algorithms for monitoring and fault diagnosis of distributed systems; (iii) design trade-offs related to the communication within hierarchical systems; and (iv) verification and complexity analysis and development of software tools.