We present a new multiresolution particle method for fluid simulation. The discretization of the fluid dynamically adapts to the characteristics of the flow to resolve fine-scale visual detail, while reducing the overall complexity ofthe computations. We introduce the concept of virtual particles to implement efficient refinement and coarsification operators, and to achieve a consistent coupling between particles at different resolution levels, leading to speedups of up to a factor of six as compared to single resolution simulations. Our system supports multiphase effects such as bubbles and foam, as well as rigid body interactions, based on a unified particle interaction metaphor. The water-air interface is tracked with a Lagrangian level set approach using a novel Delaunay-based surface contouring method that accurately resolves fine-scale surface detail while guaranteeing preservation of fluid volume.