Suppose that (K, ν) is a valued field, f (z) ∈ K[z] is a unitary and irreducible polynomial and (L, ω) is an extension of valued fields, where L = K[z]/(f (z)). Let A be a local domain with quotient field K dominated by the valuation ring of ν, and assume that f (z) is in A[z]. We describe the structure of the associated graded ring gr) for the filtration defined by ω as an extension of the associated graded ring of A for the filtration defined by ν. This gives an algorithm which in many cases produces a finite set of elements of A[z]/(f (z)) whose images in gr ω A[z]/(f (z)) generate it as a gr ν A-algebra as well as the relations between these images. We also work out the interactions of our method with phenomena such as the nontameness and the defect of an extension. For a valuation ν of rank 1 and a separable extension of valued fields (K, ν) ⊂ (L, ω) as above, our algorithm produces a generating sequence in a local birational extension A 1 of A dominated by ν if and only if there is no defect. In this case, gr ω A 1 [z]/(f (z)) is a finitely presented gr ν A 1 -module.