The present invention provides a system and method of adjusting a heartbeat timeout utilized for monitoring a process in a distributed system. The distributed system includes a plurality of processes monitoring one another by transmitting messages (i.e., heartbeats) indicative of a process being operational. A first process monitoring a second process is operable to receive one or more heartbeats from the second process in the distributed system. If the first process fails to receive a heartbeat from the second process prior to an expiration of the heartbeat timeout, the second process is suspected of failing. If the first process receives a heartbeat from the second process prior to the expiration of the heartbeat timeout, the first process recalculates the heartbeat timeout. Recalculating the heartbeat timeout includes gradually increasing or decreasing the heartbeat timeout based on a period of time to receive a heartbeat. Thus, the heartbeat timeout is gradually increased or decreased based on observed conditions, and transient conditions, which may affect transmission within the distributed system, may be accounted for prior to suspecting a process failure.