Abstract: We propose a particle-based technique for simulating incompressible fluid that includes adaptive refinement of particle sampling. Each particle represents a mass of fluid in its local region. Particles are split into several particles for finer sampling in regions of complex flow. In regions of smooth flow, neighboring particles can be merged. Depth below the surface and Reynolds number are exploited as our criteria for determining whether splitting or merging should take place. For the fluid dynamics calculations, we use the hybrid FLIP method, which is computationally simple and efficient. Since the fluid is incompressible, each particle has a volume proportional to its mass. A kernel function, whose effective range is based on this volume, is used for transferring and updating the particle's physical properties such as mass and velocity. Our adaptive particle-based simulation is demonstrated in several scenarios that show its effectiveness in capturing fine detail of the flow, where needed, while efficiently sampling regions where less detail is required.