Fault Estimation (FE), as the central part of an Active Fault Tolerant Control System (AFTCS), detects and estimates the magnitude of a fault when a fault/failure occurs. Especially for a quadrotor UAV (Unmanned Aerial Vehicle) system, it is necessary and helpful to estimate fault severity when its actuator has a partial loss of effectiveness (LOE) and time-varying fault. In this paper, a novel Adaptive Thau Observer (ATO) is proposed to detect the Partial Loss of effectiveness fault and estimate the time-varying fault severity of quadrotor actuators. Unlike earlier Fault Diagnosis (FD) methods in quadrotors, The FD scheme based on ATO cannot only isolate fault actuators, but also estimate the fault severity. So it is useful to implement in AFTCS of quadrotors. Different simulations have been carried out to show the performance and effectiveness of the proposed method.