This paper presents a gesture recognition/adaptation system for Human Computer Interaction applications that goes beyond activity classification and that, complementary to gesture labeling, characterizes the move- ment execution. We describe a template-based recognition method that simultaneously aligns the input ges- ture to the templates using a Sequential Montecarlo inference technique. Contrary to standard template- based methods based on dynamic programming, such as Dynamic Time Warping, the algorithm has an adaptation process that tracks gesture variation in real-time. The method continuously updates, during ex- ecution of the gesture, the estimated parameters and recognition results which offers key advantages for continuous human-machine interaction. The technique is evaluated in several different ways: recognition and early recognition are evaluated on a 2D onscreen pen gestures; adaptation is assessed on synthetic data; and both early recognition and adaptation is evaluation in a user study involving 3D free space gestures. The method is not only robust to noise and successfully adapts to parameter variation but also performs recognition as well or better than non-adapting offline template-based methods.