A new approach to damage classification for health monitoring of a time-varylng system is presented. The functional-series time-dependent auto regressive moving average （FS-TARMA） time series model is applied to the vibration signal observed in the time-varying system for estimating the TAR/TMA parameters and the innovation variance. These parameters are the functions of the time, represented by a group of projection coefficients on the certain functional subspace with specific basis functions. The estimated TAR/TMA parameters and the innovation variance are further used to calculate the latent components （LCs） as the more informative data for health monitoring evaluation, based on an eigenvalue decomposition technique. LCs are then combined and reduced to numerical values （NVs） as feature sets, which are input to a probabilistic neural network （PNN） for the damage classification. For the evaluation of the proposed method, numerical simulations of the damage classification for a tlme-varylng system are used, in which different classes of damage are modeled by the mass or stiffness reductions. It is demonstrated that the method can identify the damages in the course of operation and the change of parameters on the time-varying background of the system.
