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The fuzzy min-max (FMM) network is a supervised neural network classifier that forms hyperboxes for classification and prediction. In this paper, we propose modifications to FMM in an attempt to improve its classification performance when a small number of large hyperboxes are formed in the network. Given a new input pattern, in addition to measuring the fuzzy membership function of the input pattern to the hyperboxes formed in FMM, an Euclidean distance measure is introduced for predicting the target class associated with the new input pattern. A rule extraction algorithm is also embedded into the modified FMM network. A confidence factor is calculated for each FMM hyperbox, and a user-defined threshold is used to prune the hyperboxes with low confidence factors. Fuzzy if-then rules are then extracted from the pruned network. The benefits of the proposed modifications are twofold, viz., to improve the performance of FMM when large hyperboxes are formed in the network; to facilitate the extraction of a compact rule set from FMM to justify its predictions. To assess the effectiveness of modified FMM, two benchmark pattern classification problems are experimented, and the results from different methods published in the literature are compared. In addition, a fault detection and classification problem with a set of real sensor measurements collected from a power generation plant is evaluated using modified FMM. The results obtained are analyzed and explained, and implications of the modified FMM network as a useful fault detection and classification tool in real environments are discussed.