An adaptive Taylor-Kalman filter with PSO tuning for tracking nonstationary signal parameters in a noisy environment with primary focus on time-varying power signals has been presented in this piece of work. In order to deal with the dynamic envelope of the power signal, second-order Taylor expansion has been used such that the Taylor coefficients are updated with the PSO-tuned Taylor-Kalman Filter algorithm. In addition to this, for fast convergence, a self-adaptive particle swarm optimization technique has been used for obtaining the optimal values of model and measurement error covariances of the Kalman filter. The proposed algorithm is linear and therefore has less computational burden, which is easier to be implemented on a hardware platform like DSP processor or FPGA. The proposed PSO-tuned Taylor-Kalman filter exhibits robust tracking capabilities even under changing signal dynamics, immune to critical noise conditions, harmonic contaminations, and also reveals excellent convergence properties.