A novel fault tolerant attitude control scheme was proposed based on ILO (iterative learning observer) for satellite with unknown reaction wheel faults, uncertainties and unknown external disturbances. More specially, an iterative learning observer was derived to estimate reaction wheel faults and uncertainties accurately with less online computing power. Secondly, based on the estimated information, a sliding mode controller was derived to achieve the attitude stability of satellite rapidly with unknown external disturbances and reaction wheel faults. Furthermore, the stability of the ILO and the controller were approved by using the Lyapunov stability theory. Finally, simulations were carried out for satellite with unknown reaction wheel faults, uncertainties and disturbances. Results demonstrate that the proposed control scheme is more effectively and displays more feasibility by comparing with other fault tolerant control approach.