[Abstract] – Single Particle Tracking (SPT) is a powerful class of tools for analyzing the dynamics of individual biological macromolecules moving inside living cells. The acquired data is typically in the form of a sequence of camera images that are then post-processed to reveal details about the motion. In this work, we develop a local time-varying estimation algorithm for estimating motion model parameters from the data considering nonlinear observations. Our approach uses several well-known existing tools, namely the Expectation Maximization (EM) algorithm combined with an Unscented Kalman filter (UKF) and an Unscented Rauch-Tung-Striebel smoother (URTSS), and applies them to the time-varying case through a sliding window methodology. Due to the shot noise characteristics of the photon generation process, this model uses a Poisson distribution to capture the measurement noise inherent in imaging. In order to apply our time-varying approach to the UKF, we first need to transform the measurements into a model with additive Gaussian noise. This is carried out using a variance stabilizing transform. Results from simulations show that our approach is successful in tracing time-varying diffusion constants at a range of physically relevant signal levels. We also discuss the initialization for the EM algorithm based on the available data.