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This article explores a new framework of distributed state and fault estimation (DSFE) for the state-saturated systems over sensor networks. To this aim, the upper bound on estimation error covariance (EEC) is ensured and the explicit expression of the corresponding estimator gains is given with both quantization effects and state saturations. Further, a feasible upper bound is located on EEC and minimized by parameterizing the estimator gain. The matrix simplification technique is adopted to deal with the sensor network topology’s sparseness problem. Additionally, the estimation performance is first analyzed and then ensured by conducting a sufficient condition. At last, experiments are carried out to verify the feasibility of the developed DSFE method.