Many researchers have applied the concept of causation to model-based diagnosis. However, their researches are limited to simple causal theory. In this paper, the concept of generalized causal theory that contains more information is proposed. It is pointed out that the diagnostic space of a generalized causal theory is smaller than or equal to that of the corresponding simple causal theory. Furthermore, generalized causal theory is applied to the area of test. It is demonstrated that for closed generalized causal theory, the abductive differential diagnosis is equivalent to the consistency-based differential diagnosis.