In this paper, we propose a new circuit transformation technique in conjunction with the use of a special diagnostic test pattern, named SO-SLAT pattern, to achieve higher multiple-fault diagnosis resolutions. For a given list of candidate faults, which could be stuck-at, transition, bridging, or other faults, we generate a set of SO-SLAT patterns, each of which attempts to activate only one fault in the list and propagate its effects to only one observation point. Observing the responses to SO-SLAT patterns helps more precisely identify fault candidates. The method can also tolerate most of the timing hazards for more accurate diagnosis of failures caused by timing faults. The experimental results demonstrate the effectiveness of the proposed method for diagnosing multiple faults.