Multipath propagation is a major source of degradation in the performance of conventional PN code tracking loops. The mean-square tracking error of a conventional delay-locked loop (DLL) exhibits an irreducible floor due to the presence of closely spaced multipath components. In this paper, we present a new PN code tracking algorithm that does not suffer from the presence of multipath components. This algorithm utilizes a finite impulse response (FIR) adaptive filter to mitigate the effect of multipath on delay estimation. It is shown that the tap-weight vector of the adaptive filter can he used to provide accurate estimation of the multipath delays. It is also shown that the mean-squared tracking error of the proposed scheme is not affected by paths that are very close (within 1 to 2 chips apart). The effect of terminal mobility is also investigated by simulating the performance under frequency selective fading channel conditions with different Doppler frequencies. The proposed scheme is well suited for wideband CDMA systems where a large number of closely spaced multipath components need to be tracked and used in rake combining.