1. Abstract We address the challenge of implementing reliable computation of Boolean functions in future nanocircuit fabrics. Such fabrics are projected to have very high defect rates. We overcome this limitation by using a combination of cheap but unreliable nanodevices and reliable but expensive CMOS devices. In our approach, defect tolerance is achieved through a novel coding of Boolean functions; specifically, we exploit the don’t cares of Boolean functions encountered in multi-level Boolean logic networks for constructing better codes. We show that compared to direct application of existing coding techniques, the coding overhead in terms of extra bits can be reduced, on average by 23%, and savings can go up to 34%. We demonstrate that by incorporating efficient coding techniques more than a 40% average yield improvement is possible in case of 1% and 0.1% defect rates. With 0.1% defect density, the savings can be up to 90%.