A Digital Diagnostic System employs signature analysis for locating faults at the system, module, or circuit component level in electronic equipment. Predetermined correct signatures and diagnostic decision tree information for a particular device under test are stored in system memory. The diagnostic system exercises the device under test to generate signatures which are obtained at various predetermined test points and electronically compared with a stored signature. From the diagnostic decision tree information, a troubleshooting sequence is automatically established which leads directly to a faulty module or component. In-circuit microprocessor emulation may be utilized to generate one or more of the signature signals.