This paper examines the dynamic fault behavior of asynchronous sequential machines, specifically identifying the faults which cause critical races and hazards, and presents a state assignment technique leading to a machine that enters one of a small set of error states whenever a fault occurs. Entry into an error state can be checked by very simple check circuits; a self-testing check circuit and one requiring only two tests for fault detection are discussed. An extension of the state assignment technique to produce a machine that is fail-safe is also presented. The fail-safe design has the property that once a fault has caused the machine to malfunction and enter an error state, the machine never leaves the error state and therefore does not produce erroneous outputs. This machine detects all but a small class of multiple faults.