Teramac is a large custom computer which works correctly despite the fact that three quarters of its FPGAs contain defects. This is accomplished through unprecedented use of defect tolerance, which substantially reduces Teramac's cost and permits it to have an unusually complex interconnection network. Teramac tolerates defective resources, like gates and wires, that are introduced during the manufacture of its FPGAs and other components, and during assembly of the system. We have developed methods to precisely locate defects. User designs are mapped onto the system by a completely automated process that avoids the defects and hides the defect tolerance from the user. Defective components are not physically removed from the system.