The ever increasing usage of microprocessor devices is sustained by a high volume production that in turn requires a high production yield, backed by a controlled process. Fault diagnosis is an integral part of the industrial effort towards these goals. This paper presents a new methodology that significantly improves over a previous paper. The goal is construction of cost-effective programs sets for software-based diagnosis of microprocessors. The methodology exploits existing postproduction test sets, designed for software-based self-test, and may use an already developed infrastructure IP to perform the diagnosis.