In-situ laser reflectance monitoring of metal-organic chemical vapor deposition (MOCVD) is an effective way to monitor growth rate and expitaxial layer thickness of a variety of III-V and II-VI semiconductors. Materials with low optical extinction coefficients, such as ZnTe/GaAs and AlAs/GaAs for a 6328 Angstrom HeNe laser, are ideal for such an application. An extended Kalman filter modified to include a variable forgetting factor was applied to the MOCVD systems. The filter was able to accurately estimate thickness and growth rate while filtering out process noise and cope with sudden changes in growth rate, reflectance drift, and bias. Due to the forgetting factor, the Kalman filter was successful, even when based on very simple process models.