According to the characteristics of hydraulic fault diagnosis of construction machinery，its hydraulic fault diagnosis expert system is developed. Diagnosis knowledge representation method of expert system was proposed based on flowchart of fault locating. A graphical knowledge database creating tool Auto Flowchart was studied. Diagnosis knowledge database was constructed. And the structure and a fault diagnosis expert system based on flowchart knowledge representation were designed and developed.The difficulty for the expert system to acquire knowledge was solved effectively. Fault locating method for hydraulic system was realized. It was convenient to maintenance and update for diagnosis knowledge database. The faultsearching accuracy and efficiency have been improved. Finally, the application results of QYJ40B crane show that the method is effective and practical.