A system and method for conducting diagnostic tests on a network card disposed in a telecommunications node. A diagnostic application automaton is launched at predetermined intervals by a base level diagnostics automata under the control of an executive scheduler running on the network card, wherein the network card is initially in a provisioned configuration mode operable to transmit and receive communication traffic therethrough. Upon determining by the base level diagnostics automata to install the diagnostic application, the network card is reconfigured into a loopback configuration mode involving a predefined loopback path in the telecommunications node. Operations relating to the telecommunications traffic are suspended in the loopback mode, whereby one or more diagnostic tests may be performed by the installed diagnostic application by injecting appropriate test patterns at specific locations in the path. Upon completing the diagnostic tests, the network card is reconfigured into the provisioned configuration mode in order to commence the communication traffic.