Abstract: This paper introduces a consensus-based distributed filtering algorithm. Aiming at the problem of network packet-dropping in practical applications, we focus on the distributed filtering algorithm with packet-dropping. By theoretical analysis, we give a sufficient condition for the convergence of the estimation error system. We compare our algorithm with a classical filtering one by some simulations in ideal and packet-dropping cases, respectively. The results show that our algorithm does better filtering in the packet-dropping case. Furthermore, we study the influence of the consensus step-size on the estimation error covariance, and find out that an optimal step-size may lead to the minimum of estimation error covariance. Finally, we study the influence of the packet-dropping rate on our algorithm, and find that the leaders of the sensors play an important role in the filtering. We can decrease the influence of the packet-dropping on the whole network system by controlling the packet-dropping rate of the leaders.