Performance monitoring systems are becoming increasingly important in providing quality-of-service (QoS) based services and service guarantees. Performance monitoring can occur at different levels and different timescales. Either passive measurements or active measurements can be employed. Currently, a large amount of work has gone into developing mechanisms and protocols for performance and traffic monitoring at network level and large timescales. In comparison, little work has been done to use measurement information at small timescales for tackling network performance degradation and managing congestion in operational networks in real time. In this paper, we investigate a real-time loss performance monitoring and estimation scheme based on virtual buffer techniques. The proposed scheme is used to perform measurements at lower level, i.e. network node level, and small timescales, which can be used to provide real-time QoS information for network traffic and congestion control in ATM networks. The proposed scheme only requires modest computation resources. Virtual buffer techniques enable the scheme to obtain QoS information in a much reduced monitoring period, which is important for instantaneous network traffic and congestion control actions.