Ultrasonic guided wave monitoring is regularly used for monitoring the structural health of industrial pipes, but small defects are difficult to identify owing to the influence of the environment and pipe structure on the guided wave signal. In this paper, a high-sensitivity monitoring algorithm based on adaptive principal component analysis (APCA) for defects of pipes is proposed, which calculates the sensitivity index of the signals and optimizes the process of selecting principal components in principal component analysis (PCA). Furthermore, we established a comprehensive damage index (K) by extracting the subspace features of signals to display the existence of defects intuitively. The damage monitoring algorithm was tested by the dataset collected from several pipe types, and the experimental results show that the APCA method can monitor the hole defect of 0.075% cross section loss ratio (SLR) on the straight pipe, 0.15% SLR on the spiral pipe, and 0.18% SLR on the bent pipe, which is superior to conventional methods such as optimal baseline subtraction (OBS) and average Euclidean distance (AED). The results of the damage index curve obtained by the algorithm clearly showed the change trend of defects; moreover, the contribution rate of the K index roughly showed the location of the defects.