For fault prognosis of rotating machinery under variable operation, a fault tracking method based on phase space warping and smooth orthogonal decomposition (SOD) is presented to describe the degradation process of rotating machinery. Firstly, phase space is reconstructed using vibration time-series, and a tracking function of damage evolution is built by quantifying phase space warping. To compensate for cumulative model error and the error caused by variation of local probability distribution of the reference phase space points, the original time-series is partitioned into several data segments and the phase space is partitioned into several subspaces correspondingly. Several feature vectors are concatenated into tracking matrix. Secondly, the different trends caused by actual damage degradation and operation variety in the tracking matrix are separated by smooth orthogonal decomposition. According to smooth orthogonal values, dominant smooth orthogonal coordinates which reflect actual fault degradation trends are extracted. Finally, fault degradation process of bearing out-race is simulated. Rotating speed is varied during the degradation process. Applying the presented method to the degradation process tracking, the tracking matrix is built and decomposed by SOD, and the results show that the proposed method can track the evolution trend of the rotating machinery fault without the influence of operation condition variety.