The output power of the PV system continuously varies with change in irradiance and temperature. At a specified irradiance and temperature, the output power of the PV system can be varied from zero to maximum depending on the operating voltage and current. There are number of maximum power point tracking (MPPT) methods available in literature to operate the PV system at maximum power point (MPP). Among different MPPT methods, perturb and observe (P&O) method is widely used because of its low-cost and ease of implementation. When irradiance and temperature are constant or slowly varying, the P&O method tracks MPP steadily. However it fails to track MPP with rapid speed, for rapidly varying irradiance and temperature. In order to consider rapidly varying atmospheric conditions an adaptive control algorithm is proposed, by estimating the short circuit current. In this proposed method, current perturbation is considered to improve the tracking speed. The effectiveness of proposed MPPT algorithm in terms of faster dynamics and reduced oscillations compared to conventional P&O algorithm is verified using digital simulations. © 2013 IEEE.