In this paper, a fault-tolerant velocity estimation method is proposed for quadrotors in a GPS denied environment. A novel filter is developed in light of the quadrotor model and measurements from optical flow and inertial sensors. The proposed filter is capable of detecting and isolating the optical flow sensor faults, by which the velocity estimation accuracy and stability will be improved. It is also demonstrated that the wind velocity is observable in the proposed filter. Therefore, the new filter can also be implemented in a windy environment, which is a significant improvement to the previous model-aided inertial sensor estimator. At the end, some simulations are carried out to verify the advantages of our method.