In this paper, a new hybrid and switching framework is proposed for cooperative actuator fault estimation of formation flying satellites in deep space. The formation states are distributed among local detection and estimation filters. Each system mode represents a certain cooperative estimation scheme and communication topology among local estimation filters. The mode transition represents the reconfiguration of the estimation scheme, and the transition is governed by information provided by the detection filters. Simulation results confirm the effectiveness of our proposed framework in confining the effects of unmodeled and undesirable dynamics to local parameter estimates, thereby preventing the propagation of these undesirable effects to other estimation filters.