A matrix converter drive with fault-tolerant capability is presented to provide fault mode operations and improve reliability of the converter system. This paper proposes a converter structure based on the matrix converter, which can be reconfigured with the help of auxiliary devices at the event of fault occurrence. The additional devices are employed to detach a damaged leg of the converter from the drive and to bypass a load phase connected to the faulty leg. Under fault operating modes, novel post-fault modulation techniques with only six available bi-directional switches are proposed to generate three-phase balanced sinusoidal output voltage/current sets to loads. The converter reconfigurations and the associated modulation schemes are individually developed depending on a location of fault, because the matrix converter directly generates output waveforms from time-varying input voltages. As a result, no matter which phase is involved in failure, the added fault-tolerant algorithms presented can guarantee continuous operation and provide improved reliability of the overall matrix converter system. Simulation and experimental results are shown to demonstrate the feasibility of the proposed fault-tolerant schemes to the matrix converter drives.