System definition is an essential stage of FTA. Usually, a diagram defining all functional interconnections and components of the system is used as the system definition. The system definition must also include the dependencies between the components, their reliability parameters and conditions when the components are considered to have failed.

It is important that the description of the top event be both clear and concise. It sets the tone for the series of questions that must be considered when constructing the fault tree. For instance, if a top event is too vague, it can make the fault tree far too large and complex, resulting in a very unfocused fault tree. In determining the top event, it is often necessary to define not only the what (meaning what the specific fault is), but also to become more descriptive by including a description of when. The when in a top event may specify a specific mission phase or portion of the mission to which the top event applies. The fault tree results are more concise if the top event is descriptive rather than vague.