Abstract: An efficient multi-scale parameter Kalman filter method is proposed for identification of the physical parameters. The ratio of signal to noise is increased in low scale by orthogonal wavelet transform. The measurement data is decomposed by orthogonal wavelet function and the state and measurement equations can be resolved into different scales. The physical parameters of a dynamic system are estimated by parameter Kalman filter method in different scales. The theoretical analysis and numerical simulations indicate that the identification of system parameters in multi-scale is more efficient than in single scale.