We introduce the Probabilistic Multi-Hypothesis Tracking (PMHT) algorithm for particle tracking in high-energy physics detectors. This algorithm has been developed recently for tracking multiple targets in clutter, and it is based on maximum likelihood estimation by aid of the EM algorithm. The resulting algorithm basically consists of running several iterated and coupled Kalman filters and smoothers in parallel. It is similar to the Elastic Arms algorithm, but it possesses the additional feature of being able to take process noise into account, as for instance multiple Coulomb scattering. Herein, we review its basic properties and derive a generalized version of the algorithm by including a deterministic annealing scheme. Further developments of the algorithm in order to improve the performance are also discussed. In particular, we propose to modify the hit-to-track assignment probabilities in order to obtain competition between hits in the same detector layer. Finally, we present results of an implementat- ion of the algorithm on simulated tracks from the ATLAS Inner Detector Transition Radiation Tracker (TRT). We introduce the Probabilistic Multi-Hypot- hesis Tracking (PMHT) algorithm for particle tracking in high-energy physics detectors. This algorithm has been developed recently for tracking multiple targets in clutter, and it is based on maximum likelihood estimation by aid of the EM algorithm. The resulting algorithm basically consists of running several iterated and coupled Kalman filters and smoothers in parallel. It is similar to the Elastic Arms algorithm, but it possesses the additional feature of being able to take process noise into account, as for instance multiple Coulomb scattering. Herein, we review its basic properties and derive a generalized version of the algorithm by including a deterministic annealing scheme. Further developments of the algorithm in order to improve the performance are also discussed. In particular, we propose to modify the hit-to-track assignment probabilities in order to obtain competition between hits in the same detector layer. Finally, we present results of an implementation of the algorithm on simulated tracks from the ATLAS Inner Detector Transition Radiation Tracker (TRT).