This paper proposes a dynamic reliability analysis approach based on fault tree (FT) and new process capability index (PCI). This work has three contributions. First, new PCIs, namely, Cp-R, Cpk-R, Cpm-R, and Cpmk-R, are proposed on the basis of traditional PCI prototypes, and the data stability analysis results converge to (0 similar to 1] interval. These new PCI advantages and defects are compared, and the result shows that Cpmk-R can identify the stability of the dynamic data effectively. Second, fault risk index (FRI) based on Cpmk-R index, namely, Rpmk-R, is proposed to approximate the probability of basic events (BEs) for FT. Third, FRI and FT are used to analyze fault transmission and assess dynamic fault risk of equipment. A circulating cooling water heat exchange system is used for simulation to verify the practicability of the approach. Results show that the FT based on Rpmk-R can assess the dynamic fault risk of equipment accurately.