Failure mode and effect analysis (FMEA) is one of the most important activities in the quality management of product design. Within the field of product development domain, FMEA is regarded as a key driver for product quality improvement and cost reduction. There have been various FMEA approaches considering several aspects such as knowledge management, criticality analysis, and product structure or function model to conduct more effective and systematic FMEA. But previous approaches are generally based on an ad hoc model so that they have limitations such as insufficient identification on failures, low reusability of previous FMEAs, poor understanding on failure information, high dependency of expert knowledge on failure propagation, and so on. To overcome these limitations, this study proposes a formalized function model for FMEA, which is named module-based failure propagation (MFP) model. The MFP model is proposed based on the function behavior state scheme. The MFP model consists of function decomposition tree model, configuration flow graph model, function rule, and failure rule. This study describes how to build the MFP model and introduces how to carry out FMEA with the proposed MFP model. To show the benefit of the proposed MFP model, a FMEA case study on a car air purifier is performed.