This paper presents a new method for complex system failure analysis and adaptive mission planning that provides both an overall failure analysis on a system's performance as well as a mission-based failure analysis. The Adaptive Mission Planning and Analysis (AMPA) method presented here uses physics-based governing equations to identify the system's overall behavior during both nominal and faulty conditions. The AMPA method is unique in that it first identifies a specific failure or combination of failures within a system and then determines how each failure scenario will affect the system's overall performance characteristics, i.e. its functionality. Then, AMPA uses this failure information to assess and optimize various missions that the system may be asked to perform. The AMPA method is designed to identify functional failures of a given system and then, depending on the types of failures that have occurred and what tasks the system will be asked to perform, identify the optimal functional approach needed moving forward to successfully complete its mission. Ultimately, this method could be applied in-situ to systems using sensor data rather than simulations to allow autonomous systems to automatically adapt to failures. That is, by using the remaining healthy components in a new or different way to compensate for the faulty components to extend the systems lifespan and optimize the chance of mission completion.