This study introduces particle filtering (PF) for the tracking and fault diagnostics of complex process systems. In process systems, model equations are often nonlinear and environmental noise is non-Gaussian. We propose a method for state estimation and fault detection in a wastewater treatment system. The contributions of the paper are the following: (1) A method is suggested for sensor placement based on the state estimation performance; (2) based on the sensitivity analysis of the particle filter parameters, a tuning method is proposed; (3) a case study is presented to compare the performances of the classical PF and intelligent particle filtering (IPF) algorithms; (4) for fault diagnostics purposes, bias and impact sensor faults were examined; moreover, the efficiency of fault detection was evaluated. The results verify that particle filtering is applicable and highly efficient for tracking and fault diagnostics tasks in process systems.