The failure analysis focused on failure mode effect and criticality analysis (FMECA) is one of the main tasks of PHM design. This article analyzes the defects of the current augmented FMECA (aFMECA) method and puts forward the application of functional FMECA in the conceptual design phase of missile design. The table of functional FMECA and hardware (software) FMECA are improved. Through the correspondence of function detection demands and failure detection methods, the detection data connection between the conceptual design phase and detailed design phase is established. According to the analysis result of FMECA, the failure diagnosis methods and failure forecast methods are preliminary set, and the configuration of related test points and sensors are arranged. By giving the example of a missile control system, this article demonstrates the missile PHM design method based on a FMECA, the result of which proves the feasibility of this method.